The Ministry of Finance of the People's Republic of China and the Macao Special Administrative Region government recently announced that the central government will issue 6 billion yuan in national 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, according to official statements. In recent years, the Ministry of Finance has conducted regular issuance of yuan treasury bonds in both Hong Kong and Macao, with the frequency and scale steadily expanding. With State Council approval, the Ministry of Finance will issue 84 billion yuan in treasury bonds across six tranches in Hong Kong in 2026, representing an increase of 16 billion yuan compared to 2025. On August 5, the Ministry successfully issued the fourth tranche of 15 billion yuan in treasury bonds in Hong Kong this year, bringing cumulative issuance to 59.5 billion yuan for 2026, achieving 71% of the annual target.

The routine issuance of offshore yuan treasury bonds in Hong Kong and Macao provides global investors with high-credit-rated yuan assets, said Guo Yiming, investment advisory director at Shaanxi Jufeng Investment Consulting Co., Ltd. The upcoming Macao bond issuance features a more diversified maturity structure, which helps refine the regular issuance mechanism and plays a positive role in optimizing Macao's bond market ecosystem while promoting connectivity between Macao, the mainland, and international markets.

Regular issuance itself is a key indicator of growing market recognition, according to Yuan Shuai, deputy secretary-general of the Zhongguancun IoT Industry Alliance. From the perspective of Hong Kong and Macao market development, sustained and stable treasury bond supply provides 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, enhancing the overall appeal of offshore yuan assets, and fostering a healthier, more sustainable development ecosystem for the offshore yuan market.

Beyond treasury bonds, offshore yuan local government bond issuance has also seen recent progress. On August 6, the People's Government of Guangdong Province completed the issuance of 2.5 billion yuan in offshore yuan local government bonds in Macao, marking the sixth consecutive year since 2021 that Guangdong has issued such bonds in Macao, with cumulative issuance exceeding 13 billion yuan. The latest bond offering attracted significant market attention and was oversubscribed. Among the 2.5 billion yuan in bonds issued, the three-year green bonds totaled 1.5 billion yuan with a coupon rate of 1.46%, the five-year blue bonds totaled 500 million yuan at 1.57%, and the two-year Hengqin Guangdong-Macao Deep Cooperation Zone themed special bonds totaled 500 million yuan at 1.43%.

For local governments, issuing bonds in offshore markets not only broadens financing channels but also showcases regional economic vitality and creditworthiness to international markets, Yuan Shuai noted. The issuance of offshore yuan bonds by both the Ministry of Finance and local governments serves dual purposes, Guo Yiming added. It expands the supply of offshore yuan bonds, attracts overseas investors across various categories, and broadens cross-border financing pathways, while also improving the supporting market infrastructure for trading and custody in the offshore yuan market, thereby strengthening the yuan's function as an investment and financing currency.