Panda bond issuance hits record high in China as foreign borrowers surge

In the initial five months of 2026, China saw an unprecedented surge in panda bond issuance, spurred by a more relaxed monetary policy from Beijing, an expanded bond market, and the internationalization of the yuan. May alone witnessed 11 issuers selling 14 panda bonds, accumulating 26.64 billion yuan ($3.7 billion), marking a staggering 246% increase compared to the previous year, and setting a new monthly record. From January to May, total issuance reached 136.5 billion yuan, a rise of 90.3% year-on-year. Notably, Kazakhstan debuted in the panda bond market on May 26, raising 3.4 billion yuan, while Pakistan became the first South Asian nation to issue a sustainable development bond of 1.75 billion yuan on May 15. Among the May issuers, five were exclusively offshore borrowers, securing 13.55 billion yuan, which constituted over half of the total. This trend underscores the increasing involvement of foreign investors in China's domestic debt market.