Why Wall Street banks and foreign borrowers are rushing to tap China's cheap money

SHENZHEN, CHINA - APRIL 12: A Chinese national flag is seen in the foreground with container ships, cranes, and stacked shipping containers at the Yantian International Container Terminal under cloudy skies, on April 12, 2025 in Shenzhen, China. (Photo by Cheng Xin/Getty Images) Cheng Xin | Getty Images News | Getty Images Foreign governments, Wall Street banks and multinational companies are flocking to China's domestic bond market as some of the world's cheapest borrowing costs turn the yuan into an increasingly attractive funding currency. The yuan-denominated bonds, also known as panda bonds, are sold by overseas issuers in China's onshore market and have become a major beneficiary of Beijing's push to internationalize its currency amid a widening gap between Chinese and Western interest rates. Issuance has accelerated sharply this year, with sovereign borrowers including Kazakhstan and Pakistan joining global financial institutions such as Morgan Stanley and Deutsche Bank, as well as multinational firms including Volkswagen and Henkel . Deutsche Bank, as recently as late May, announced that it raised 3.5 billion yuan ($518 million) through a heavily oversubscribed three- and five-year panda bond offering. Panda bond issuance has remained robust in recent years. The issuance volume hit a record 197.8 billion yuan in 2024 and totaled 183.1 billion yuan in 2025, according to Moody's. …