Opening up panda bond sector will pay enormous dividends

The nation's reform agenda is taking hold, building on three decades of unprecedented growth that has lifted millions of Chinese out of poverty. Despite the economic slowdown, projections that the Chinese economy will grow by more than 7 percent and create more than 10 million jobs this year are still far more favorable than the outlook in many economies.

Investors are keen to be part of China's growth story, and they are looking to the capital markets for opportunities. Foreign investors are clamoring for yuan-denominated assets while international financial centers are racing to become hubs for transactions in the Chinese currency.

In October, the United Kingdom became the first Western sovereign borrower to launch dim sum bonds, which are yuan-denominated securities issued outside the Chinese mainland. The issue generated so much interest that the bond size was increased by one-third and it was more than twice oversubscribed.