SHANGHAI (Reuters) - France will encourage its institutions to issue yuan-denominated "panda bonds" as part of efforts to boost financial cooperation with China, China's Ministry of Finance said on Tuesday following a meeting between the two countries' governments.
In a statement published on its website (http://www.mof.gov.cn), the ministry also said the two sides would continue to support the development of Paris's offshore yuan market.
"The basis of local China-France economic and trade cooperation is good and the potential is large," it said.
The joint statement followed a one-day bilateral dialogue in Paris on economic and financial issues attended by Chinese Vice Premier Ma Kai and French Minister of the Economy and Finance Michel Sapin, it said.
France's pledge to push panda bonds, yuan-denominated debt issued by foreign entities in China, comes after Ma visited London last week, and China said it would grant British banks licenses to underwrite the bonds.
Pioneered more than a decade ago, Panda bonds have only taken off over the last couple of years as Chinese policy makers have allowed foreign issuers into their domestic bond market.
In the first nine months this year, panda bond issuance amounted to 84.2 billion yuan ($12.28 billion), compared with 89.4 billion yuan for dim sum bonds, statistics from Bank of China International showed.
JPMorgan (NYSE:JPM) said in a note in June that 12 billion yuan worth of panda bonds had been sold in 2015.
Companies represent almost two-thirds of that issuance, the data showed, although most of these were overseas offshoots of Chinese firms. Foreign governments accounted for 14 percent of the total while financial firms and supranationals made up 12 and 9 percent respectively.
Earlier this month National Bank of Canada (TO:NA) issued a 3.5 billion yuan panda bond, becoming the first North American financial institution to do so.
The Chinese and French delegations discussed a range of other issues, and China said it would welcome more French institutions to apply for RQFII status, and would also consider increasing France's RQFII quota in accordance with investor demand, the statement said.