‘Dim sum’ sale bolsters China ties

British Columbia’s plan to be the first foreign government to sell yuan-denominated bonds is opening the door to more capital flows between Canada and China as the nations’ economic ties deepen.

The province may sell so-called dim sum bonds before the end of March, Jim Hopkins, an assistant deputy minister in B.C.’s finance ministry, said in an interview.

The sale may raise as much as $160 million, with a term of between two and five years. The proceeds would immediately be swapped into Canadian dollars from Chinese renminbi (RMB), he said.

“We’re perched on the Pacific and have connections and trade with China,” Hopkins said. “And so many of our citizenry are of Chinese descent, that the interest in RMBdenominated banking and investing is an activity that we should see a disproportionate benefit from.”

The deal comes after the Chinese and Canadian governments laid the groundwork for more bilateral capital flows in September with a pact affording legal protections to investors in each nation.

The Canadian government has been promoting China as a market for its energy products.

Foreign government-owned lenders that sold yuan bonds in Hong Kong this year include Abu Dhabi Commercial Bank PJSC and Landeskreditbank Baden-Wuerttemberg Foederbank, owned by the German state of Baden-Wuerttemberg, according to data compiled by Bloomberg.

“We’re making a statement of confidence in the emergence of China as a global economic power and the rise of the renminbi,” Hopkins said.

“A lot of our economic growth over the past decade has come from our trade with Asia.”

B.C. exported $2.4 billion of goods to China this year.