China surpasses US in corporate debt sales as the world's 2 largest economies see starkly different central bank policies
- US dollar corporate debt sales are hitting their lowest levels in 11 years, according to Bloomberg data.
- Chinese yuan-denominated bond sales have now exceeded those of the dollar.
As the Federal Reserve and the People's Bank of China diverge in monetary policy strategies, China's corporate bond deals have overtaken those in the US in recent months, according to Bloomberg.
Yuan-denominated debt issuance by non-financial firms totaled 2.04 trillion yuan sales (about $306 billion, based on currency exchange rates at the time) between April and August. In the same stretch, sales of dollar-denominated corporate debt totaled $283 billion.
Beijing's monetary policy has allowed many firms to sell bonds at some of the cheapest prices in over a decade. The People's Bank of China has slashed key interest rates in a bid to bolster a faltering, COVID-19 lockdown-ridden economy.
Meanwhile, the Fed is hiking rate aggressively to tame inflation, and dollar debt sales have plunged 40% to $592 billion so far this year, their lowest levels in 11 years, per Bloomberg. The issuance of yuan notes has slipped about 6% in 2022.
Still, total dollar debt issuance year to date remains higher than those in yuan as the trend in China's debt sales underscore the size of its economy, rather than the international popularity of the yuan.