China Seeks Antidote for Outflows by Allowing More Overseas Debt
- Dollar bond sales from China firms declined 17% this year
- Streamlined approvals seek to revive borrowing, inflows
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China is seeking an antidote for the capital outflows that are weakening the yuan by making it easier for companies to borrow abroad and bring money back into the country. It may be swimming against the tide.
The National Development and Reform Commission will remove a quota system for companies to issue certain international bonds and loans and require only registration rather than applications for such borrowing, it said Wednesday. Whether issuers will respond is up for question. Dollar-denominated bond sales from the nation’s firms have dropped 17 percent this year after central bank interest rate cuts and the yuan devaluation last month made financing onshore more appealing.