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Dairy Giant Dominates China's Tech Bond Market
2 Mar
Summary
- Dairy firm Yili issued more tech bonds than actual tech companies.
- China's tech bond program attracts traditional sector issuers.
- Short-term bond maturities suggest fundraising, not innovation.
China's program designed to fuel technology sector growth through onshore bonds has seen an unusual leading issuer: dairy giant Inner Mongolia Yili Industrial Group Co. This company has issued 45 billion yuan ($6.5 billion) in technology and innovation bonds this year, making it the largest issuer under the program, surpassing dedicated tech firms.
The program offers companies less regulatory scrutiny for debt sales, attracting a broad range of issuers, including many state-owned entities and those from traditional sectors like coal, steel, and utilities. Analysts note that while permitted, this outcome deviates from the policy's intended focus on innovation.
