More than one trillion yuan in offshore renminbi may now have a more precise "measuring tool."

In early July, Postal Savings Bank of China, China CITIC Bank, and CCXI Index jointly launched a suite of offshore renminbi bond valuation and index products. This marks the first time domestic institutions have introduced benchmark products for the offshore renminbi bond market, providing a more transparent and quantifiable pricing reference.

This is the inaugural valuation product for offshore renminbi bonds jointly developed by commercial banks and a third-party rating agency, covering over 90% of the outstanding bond market. Concurrently, the involved institutions also launched a stratified offshore renminbi bond index based on credit dimensions.

What Does This New Measuring Tool Look Like?

So-called "offshore renminbi bonds" refer to bonds denominated in renminbi but issued outside the Chinese mainland. The most common type is the "dim sum bond" issued in Hong Kong.

Prior to this development, there was no official pricing benchmark for offshore renminbi bonds, and quotes from different intermediaries could vary significantly.

The new offshore renminbi bond valuation, released through the collaboration of Postal Savings Bank, China CITIC Bank, and CCXI Index, is calculated by integrating multi-source data including market transaction prices and real-time quotes. To a certain extent, this provides the market with a fair pricing basis, thereby enhancing the offshore renminbi bond market.

The institutions also simultaneously launched offshore renminbi bond index products. These serve a dual purpose: they offer investors a gauge to understand market performance levels, and they facilitate comparisons across specific sub-indices such as government bonds, financial bonds, and corporate bonds. Innovatively, the suite also includes indices for investment-grade bonds and select investment-grade bonds, allowing investors to choose according to their individual risk preferences.

The Rapidly Expanding Offshore Market

In recent years, driven by the increasing attractiveness of renminbi-denominated assets, improvements in offshore renminbi liquidity, and the financing cost advantages stemming from diverging Sino-US interest rates, the offshore renminbi market has experienced almost explosive growth.

Statistics up to the end of April 2026 show that the outstanding amount of offshore renminbi bonds circulating in Hong Kong alone has surpassed 2 trillion yuan. Since the beginning of 2026, the issuance scale of offshore renminbi bonds has exceeded 800 billion yuan, representing a year-on-year increase of over 50%.

Within this market, the demand for bond valuation and index tools has become particularly urgent.

Aligning with the Expansion of "Southbound Connect"

Furthermore, the expansion of the "Southbound Connect" program forms part of the backdrop for this innovation.

"Southbound Connect" refers to the southbound cooperation under the Bond Connect scheme between Hong Kong and the mainland bond markets. It is a mechanism that allows mainland institutions to invest in the Hong Kong bond market via infrastructure links between the two regions. Simply put, it is a channel for domestic institutions to invest in Hong Kong's debt market.

Since the People's Bank of China announced the expansion of the "Southbound Connect" investor base in July 2025, and following the official approval and completion of the first transactions by six leading insurance companies, including China Life, Ping An Life, and CPIC Life, to invest in dim sum bonds via the channel in June 2026, the activity level of "Southbound Connect" has been the envy of external observers.

At the launch event for the offshore renminbi bond valuation and index products, Yan Yan, Chairman of China Chengxin International Credit Rating, stated, "With the rapid expansion of the offshore renminbi bond market, there are higher and more urgent demands from the market for multi-layered, refined tools for price discovery, risk management, and asset allocation."

Continuous Improvement and Standardized Development

The maturity of a financial market largely depends on the completeness of its pricing infrastructure.

As more institutional investors enter the market and the renminbi exchange rate trends towards two-way volatility, investors are beginning to place standard terms commonly found in US dollar bonds on the negotiation table. This industry standardization for offshore renminbi bonds provides a further boost to the internationalization of the renminbi.

This development will also clearly contribute to the maturation of the current dim sum bond market.

Similar progress is evident elsewhere. For instance, in earlier years, dim sum bond issuance documents often emphasized clauses such as: "Events of default applicable to the bonds are limited to non-payment of principal or interest (within a grace period) and the liquidation of the issuer. The bonds will not benefit from negative pledge or cross-default clauses." This situation is now being rectified and improved.