1. Report Industry Investment Rating - The report does not mention the industry investment rating. 2. Core View of the Report - Since the beginning of 2025, the offshore RMB bond market has continued to thrive in both supply and demand, and the annual issuance is expected to hit a new high. Driven by multiple factors and policy support, the offshore RMB bond market is facing new development opportunities [1]. 3. Summary According to Relevant Catalogs 3.1 Offshore RMB Bond Issuance - As of September 2, 2025, the issuance of offshore RMB bonds has reached a record high for the same period, exceeding RMB 550 billion, and the annual issuance is expected to exceed that of 2024 [2]. 3.2 Drivers of the Thriving Issuance - **Interest rate differential**: The inversion of Sino - US risk - free interest rates makes the RMB financing cost significantly lower than that of the US dollar. Since 2023, the US Treasury yield has been significantly higher than that of China, and although the spread has narrowed, it is still about 200 basis points, making RMB bond financing cheaper, especially for high - rating issuers [4]. - **Yield advantage**: The yield of offshore RMB bonds is higher than that of domestic bonds of the same issuer. Since 2023, the offshore yield of 3 - year Treasury bonds has been on average more than 30 basis points higher than the on - shore yield. After mid - May 2025, the spread narrowed to about 10 basis points. The credit spread of offshore RMB bonds is also generally higher, attracting domestic funds. The expansion of the Bond Connect's "Southbound Link" to non - banking institutions in July 2025 is conducive to attracting more domestic funds [6]. 3.3 Concentration of Issuing Entities - Chinese issuers dominate the offshore RMB bond issuance, accounting for about 60%. In the context of Sino - US interest rate differentials, many Chinese issuers choose to issue offshore RMB bonds for refinancing after the maturity of US dollar bonds [7]. - The issuance of urban investment bonds has increased significantly in the past two years, accounting for more than 30% in 2023 and 2024. The reasons include the rise in US dollar financing costs, the tightening of domestic urban investment bond issuance, and the increased market confidence in urban investment bonds [9][11]. 3.4 Favorable Factors for Market Development - **Financing cost advantage**: It is expected that the situation where the financing cost of offshore RMB bonds is lower than that of US dollar bonds will continue. Although the Fed may cut interest rates, the decline in US long - term bond yields may be limited, while the yield of RMB Treasury bonds still has room to decline [14]. - **Policy support**: The "Southbound Link" was expanded to non - banking institutions in July 2025, and the total quota is expected to be increased, which will increase the demand for offshore bonds and improve market activity [15]. - **Increased demand for non - US assets**: The implementation of the US "Big and Beautiful" Act has increased concerns about the unsustainability of US finances, and the market's demand for RMB assets is expected to rise [15]. - **Infrastructure improvement**: The Ministry of Finance has issued offshore Treasury bonds in Hong Kong for many years, optimizing the yield curve. The Hong Kong Stock Exchange is researching the launch of Chinese Treasury bond futures. The first tokenized offshore RMB public offering bond has been launched, enhancing issuance efficiency and bond liquidity [16].