Tsinghua Economist Proposes China Issue 10 Trillion Yuan in Offshore Sovereign Bonds
nashnova research
Tsinghua professor Ju Jiandong proposes China sell ¥10 trillion in yuan-denominated sovereign bonds offshore. If enacted, foreign holdings would jump from 1.1% to roughly 20% — a direct test of Beijing's long-held belief that more foreign debt undermines exchange-rate stability.
How big is this proposal, and what is the money for?
Ju Jiandong laid out the plan on September 19 at an economics forum in Beijing: ¥10 trillion in yuan-denominated sovereign bonds issued offshore — roughly $1.49 trillion.
The funds would serve three purposes: fiscal expansion, relief for local-government finances, and a new supply of safe assets for global investors.
This means → the proposal tries to solve two problems at once — China's domestic fiscal gap and the yuan's path toward reserve-currency status.
How low are China's foreign debt levels right now?
Ministry of Finance data show total sovereign debt at ¥41.2 trillion as of end-2025, with foreign-held debt at just 1.1%.
In plain terms = China barely borrows from foreigners — that ratio is among the lowest of any major economy.
If the plan went ahead, the foreign share would rise from 1.1% to about 20%, landing squarely in the range typical of large economies.
What would this mean for the yuan?
Reuters Breakingviews argues that a large pool of offshore yuan bonds would give global investors a new source of safe assets.
This means → more foreign central banks and funds holding yuan assets, potentially strengthening the currency's global reserve status.
An offshore funding channel would also ease domestic fiscal-financing pressure — Beijing would no longer rely solely on the domestic market to absorb government bonds.
What is the biggest obstacle?
Reuters Breakingviews identifies Beijing's long-held core belief: expanding foreign debt will weaken exchange-rate stability.
In plain terms = the government has always worried that owing more to foreigners makes the yuan harder to manage and capital flows harder to control.
This reflects a barrier that is not technical but political — finding the balance between larger offshore issuance and maintaining a stable exchange rate.
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