South Korea has been approved a 3 billion yuan ($468 million) quota to issue yuan-denominated bonds on China's interbank bond market, which has drawn rising interest from foreign entities.
The approval ties in with China's efforts to widen the domestic bond market and diversify products available on the interbank bond market that is opened to institutional investors, the People's Bank of China said in a statement yesterday.
The interbond market makes up 70 percent of China's total bond transactions, the PBOC added.
The approval is a result of Chinese Premier Li Keqiang's visit to South Korea in November when the two countries agreed to deepen financial cooperation, the PBOC said.
Applauding the approval, South Korea's finance ministry yesterday said it plans to hold a road show for potential investors from today to Friday in Beijing and Shanghai.
The ministry said it anticipates its yuan bond issuance to boost South Korean financial institutions' entrance into China and to expand the investor base in China for South Korean bonds.
The issuance was approved when "panda bonds" or yuan-denominated bonds issued by foreign entities on the onshore market were gaining popularity among international issuers.
On Monday, the Hong Kong unit of Standard Chartered Bank said it sold a 1 billion yuan panda bond with 3.5 percent yield.
Earlier in November, the Canadian provincial government of British Columbia completed registration to issue a 6 billion yuan panda bond on the interbank bond market.