Goldman Sachs leads US banks in record offshore renminbi borrowing, securing RMB47.5bn this year—more than doubling 2022 levels. The surge reflects low mainland interest rates and Beijing’s push to internationalize the currency, with dim sum bonds hitting RMB300bn so far in 2024. These offshore RMB-denominated debts, issued mainly in Hong Kong, attract foreign lenders seeking higher yields than Japan’s rising bond market offers.**

The trend is fueled by China’s expanded Bond Connect program, which now allows insurers and non-banks to invest in Hong Kong fixed-income assets. Chinese institutional investors, pressured by ultra-low domestic yields (1.75% for 10-year bonds), are diverting capital abroad. Goldman’s RMB32.1bn issuance accounts for 10% of total dim sum bonds, with proceeds hedged into dollars and deployed globally, bypassing China’s capital controls.**

While foreign issuers now dominate—including Portugal, Korea Development Bank, and Morgan Stanley—domestic Chinese tech firms drove last year’s growth. Economists note the offshore renminbi is displacing the Japanese yen as a funding currency, as Japan’s 10-year yields hit 2.4%, up from 0.61% in early 2024.**

Goldman expects rivals to follow as demand persists. Analysts emphasize the renminbi’s growing role in global finance, with Beijing promoting it as a reserve currency alternative to the US dollar. The bank’s strategy highlights a shift: RMB funds in Hong Kong operate under fewer restrictions, making them a flexible tool for multinational capital needs.