The Ministry of Finance of the People's Republic of China and the Macao Special Administrative Region government have jointly announced that the central government will issue RMB 6 billion in sovereign bonds in Macao on August 20, 2026. This marks the fifth consecutive year that the central government has issued yuan-denominated treasury bonds in Macao.

In recent years, the Ministry of Finance has maintained a regular issuance schedule for yuan sovereign bonds in both Hong Kong and Macao. With State Council approval, the Ministry of Finance will issue RMB 84 billion in sovereign bonds across six tranches in Hong Kong during 2026, representing an increase of RMB 16 billion compared to 2025. On August 5, the Ministry successfully issued the fourth tranche of RMB 15 billion in Hong Kong, bringing the cumulative issuance for the year to RMB 59.5 billion, achieving 71% of the annual target.

The regular issuance of offshore yuan sovereign bonds in Hong Kong and Macao provides global investors with high-credit-quality yuan assets, according to market analysts. The upcoming Macao issuance features a more diversified maturity structure, which should help refine the regular issuance mechanism and play a constructive role in optimizing Macao's bond market ecosystem while strengthening connectivity between Macao, the mainland, and international markets.

Regular issuance itself represents a significant milestone in market recognition. From the perspective of the Hong Kong and Macao markets, sustained and stable sovereign bond supply offers ample high-credit-quality safe assets for local offshore yuan markets, effectively enriching investment options. The continuously optimized maturity structures and issuance arrangements can better match the allocation needs of different investor types, further activating trading activity in the offshore yuan market and enhancing the overall appeal of offshore yuan assets. This supports the formation of a healthier and more sustainable development ecosystem for the offshore yuan market.

Beyond sovereign bonds, offshore yuan local government bonds have also made fresh progress. On August 6, the People's Government of Guangdong Province completed the issuance of RMB 2.5 billion in offshore yuan local government bonds in Macao. This marks the sixth consecutive year since 2021 that Guangdong has issued such bonds in Macao, with cumulative issuance now exceeding RMB 13 billion. The bond sale attracted widespread market attention and was oversubscribed.

Of the RMB 2.5 billion issuance, RMB 1.5 billion was allocated to three-year green bonds with a coupon rate of 1.46%, RMB 500 million to five-year blue bonds at 1.57%, and RMB 500 million to two-year special-purpose bonds themed around the Hengqin Guangdong-Macao Deep Cooperation Zone at 1.43%.

For local governments, issuing bonds in offshore markets not only broadens financing channels but also demonstrates local economic vitality and creditworthiness to the international market. Both the Ministry of Finance and local governments issuing offshore yuan bonds can expand the supply of offshore yuan debt instruments, attract diverse international investors, broaden cross-border financing avenues, and improve the supporting market infrastructure for offshore yuan trading and custody. This helps promote the yuan's function as an investment and financing currency.