Why are foreign companies issuing 'panda bonds'? | FT #shorts

Market Trends & Funding Strategies - Multinational companies are increasingly borrowing in RMB (remmbb) to seek cheaper funding and hedge against US-China relations [1][2] - Total RMB borrowing by overseas companies (Panda bond issuance) reached a record high of almost 200 billion RMB (remmbb) in 2024 [1] - Panda bond issuance in Q1 2024 exceeded 40 billion RMB (remmbb), marking the second-highest quarter on record [1] Strategic Shift & Regulatory Impact - Global companies are shifting their strategy to raise debt locally for their Chinese subsidiaries [2] - Chinese authorities are now allowing companies to transfer funds raised from Panda bonds outside of mainland China [2] - This "in China for China" strategy helps companies reduce transaction costs and hedge against potential financial restrictions due to US-China tensions [2] Panda Bond Issuers - International organizations and foreign governments, such as Hungary, have also issued panda bonds [3]