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Beijing sends corporate China a message: Diversify away from U.S. dollar debt

Section: Daily Dispatches

By Neal Kimberley
South China Morning Post, Hong Kong
Tuesday, November 12, 2019

China has capitalised on a low-yield environment in Europe to issue euro-denominated government bonds cheaply. It is also setting an example to Chinese companies, in the hope of weaning them off dollar-denominated debt dependency.

Everyone loves a good deal. Last week saw an enthusiastic market response to China's issuance of its first euro-denominated government bonds for 15 years. But this was more than just a successful bond launch.

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Beijing's timing isn’t accidental, with borrowing costs in the euro zone so low. Additionally, Chinese firms may follow Beijing's lead and lessen their reliance on U.S. dollar-denominated corporate debt. ...

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