China's issuance of its first euro-denominated sovereign bonds in Luxembourg is expected to boost China-Europe cooperation in finance, offer a new option for international investors to allocate their assets, and help Chinese firms to reduce overseas financing costs, according to bank executives.
The Chinese Ministry of Finance announced on Wednesday that it has successfully issued euro-denominated sovereign bonds worth four billion euros (about 4.61 billion U.S. dollars) in Luxembourg on Tuesday.
Of the total, the issuance of four-year bonds stood at two billion euros in value with a yield of 2.401 percent, and the issuance of seven-year bonds totaled two billion euros with a yield of 2.702 percent, the ministry said in a statement on its website.
The bonds were warmly received by the market, with international investors subscribing enthusiastically. Total subscription reached 100.1 billion euros, 25 times the issuance amount.
"The successful issuance of the bonds closely links Euro funds with China's development needs, representing a successful practice in deepening China-Europe financial cooperation," said Cao Jin, manager of the Investment Banking Department at Bank of Communications (Luxembourg).
The issuance of the bonds has diversified the investor base in both geography and type, according to the finance ministry.
By region, European and Asian investors accounted for 51 percent and 35 percent of total subscription, while Middle Eastern and offshore U.S. investors accounted for 8 percent and 6 percent, respectively.
By investor type, sovereign institutions accounted for 26 percent of the investor base, while funds and asset management institutions, banking and insurance institutions, and dealers represented 39 percent, 32 percent and 3 percent, respectively.
"The Ministry of Finance's issuance of euro-denominated sovereign bonds in Luxembourg is aimed at improving the euro yield curve and enriching the asset allocation basket for international investors. This also provides an authoritative market pricing benchmark for subsequent issuance of euro sovereign bonds by Chinese enterprises in the European market, helping to reduce the overseas financing costs for Chinese companies," said Liu Wei, manager of the Investment Banking Department at Bank of China (Luxembourg) Limited.
Nicolo Salsano, CEO for Europe at Standard Chartered, said he looks forward to a deepened trade partnership between China and Europe following the bond issurance.
"The trade between China and Europe has gone from strength to strength over the last decades, with China being a key importer for Europe and obviously China also being a key export destination for European corporates. So the economic partnership is a huge importance for Europe and for China also and we certainly look forward to continued strength of that very important trade relation," said Salsano.
China's euro bond issuance in Luxembourg to boost financial cooperation with Europe: bank executives
Chinese Foreign Minister Wang Yi said on Tuesday that mediation efforts of the Pakistani side regarding the Middle East tensions are in the common interests of all parties.
Wang, also a member of the Political Bureau of the Communist Party of China Central Committee, made the remarks in his talks with Pakistani Deputy Prime Minister and Foreign Minister Mohammad Ishaq Dar in Beijing.
During their talks, the two sides exchanged views on current international issues and regional conflicts.
Wang welcomed the visit of the Pakistani side to Beijing for discussion on easing tensions in the Middle East, just after its holding of a quadrilateral foreign ministers' meeting in Islamabad.
He said China supports and looks forward to Pakistan playing a unique and important role in easing the situation and resuming peace talks. This process is no easy task, and Pakistan's mediation efforts are in line with the common interests of all parties, Wang added.
He noted China is willing to make joint efforts with Pakistan to end the hostilities as soon as possible, create opportunities for peace and open the window for peace talks.
On bilateral ties, Wang said this year marks the 75th anniversary of the establishment of diplomatic relations between China and Pakistan, calling on both sides to implement the important consensus reached by the leaders of the two countries and constantly advance the building of a China-Pakistan community with a shared future.
For his part, Dar said the Pakistan-China friendship is precious and deeply rooted in people's hearts, adding that Pakistan is willing to work with China to promote the continuous development of the all-weather strategic cooperative partnership between the two countries.
Dar thanked China for supporting Pakistan's mediation of the situation in Iran, adding that the current conflict has disrupted international energy supplies and caused heavy damage to developing countries.
Noting that solutions can only be found through negotiation, Dar said Pakistan is willing to strengthen communication and coordination with China to push all parties to start peace talks as soon as possible and restore regional peace.
The two sides also put forward a five-point initiative for restoring peace and stability in the Gulf and the Middle East region:
I. Immediate cessation of hostilities: China and Pakistan call for immediate cessation of hostilities and utmost efforts to prevent the conflict from spreading. Humanitarian assistance must be allowed to all war-affected areas.
II. Start of peace talks as soon as possible. Sovereignty, territorial integrity, national independence and security of Iran and the Gulf states should be safeguarded. Dialogue and diplomacy is the only viable option to resolve conflicts. China and Pakistan support the relevant parties in initiating talks, with all parties committing to peaceful resolution of disputes, and refraining from the use or the threat of use of force during peace talks.
III. Security of nonmilitary targets. The principle of protecting civilians in military conflict should be observed. China and Pakistan call on parties to the conflict to immediately stop attacks on civilians and nonmilitary targets, and fully adhere to International Humanitarian Law, and stop attacking important infrastructure, including energy, desalination and power facilities, and peaceful nuclear infrastructure, such as nuclear power plants.
IV. Security of shipping lanes. The Strait of Hormuz, together with its adjacent waters, is an important global shipping route for goods and energy. China and Pakistan call on the parties to protect the security of ships and crew members stranded in the Strait of Hormuz, allow the early and safe passage of civilian and commercial ships, and restore normal passage through the Strait as soon as possible.
V. Primacy of the United Nations Charter. China and Pakistan call for efforts to practice true multilateralism, to jointly strengthen the primacy of the United Nations, and to support the conclusion of an agreement for establishing a comprehensive peace framework and realizing lasting peace based on the purposes and principles of the UN Charter and international law.
Pakistan's mediation efforts in common interests of all parties: Chinese FM
Pakistan's mediation efforts in common interests of all parties: Chinese FM
