'Panda Bonds could go shallow,' says expert

Despite heavy issuances last year, Panda Bonds, or renminbi-denominated bonds issued by companies incorporated overseas, have to overcome several hurdles to grow in a sustainable manner, ratings agencies and investment bankers have said.

The chief hurdle is the disconnect between China's onshore bond market, where the bonds are issued, rated and traded, and the international markets, where issuers and many investors come from. This factor could discourage global issuers and investors, industry insiders said.

Guan Jianzhong, chairman of Dagong Global Credit Rating Co, said there is a marked gap between how a Panda Bond is rated by a major global ratings agency, and its subsidiary in China.