China to issue yuan bonds in Macau diversification attempt

China will issue 5bn yuan in bonds to Macau later this month.

Macau's gaming sector accounting for more than half of Macau’s GDP, but China wants to diversify its economy, so that the province generates other revenue streams.

This August, Macau saw a 686% annual growth and made MOP 17.21bn ($2.14bn) in total gaming revenue.

The 5bn yuan (US$685m) worth of sovereign bonds is the Government’s third offshore bond to Macau. China previously issued 2bn yuan bonds in 2019 and 3bn yuan bonds in 2022 to Macau. 

Furthermore, alongside its economic diversification intentions, the bonds are also being issued to help popularise the use of the yuan currency in Macau; straying away from the Macanese Pataca (MOP). The bonds will be issued on 20 September.

‘The move will further strengthen financial cooperation between the Chinese mainland and Macau,Table games providing investors with secure and stable investment options,’ a Government statement read.

Gordon Tsui Luen-on, Director of Hong Kong Securities Association, clarified: “The plan to issue yuan bonds in Macau indicates the commitment of the Central Government to support Macau to diversify its economy and cut down the reliance on gaming.” 

“It is also part of the Central Government’s plan to boost the internationalisation of the yuan by offering more offshore yuan bonds for international investors to buy. They should be popular with institutional investors who want to increase their holding in yuan assets.”






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