B.C.’s NDP government appears to have had a change of heart on so-called “Panda Bonds.”
The province announced Friday that it was entering the Chinese bond market, issuing a new round of bonds worth about C$192 million, and with a three-year term.
Panda Bonds are a way for the government to raise money from the Chinese capital market.
The money, all of it in Chinese currency, is invested into a bank in Singapore, where it is expected to earn interest in excess of what is owed on the bonds. The money is then re-invested into B.C.’s trade mission in China.
B.C. issued its first Panda Bonds, worth about C$665 million, in 2016, saying at the time it expected the program to generate about $13 million over the bonds’ three year term.
But the NPD, then in opposition, raised concerns about the program — suggesting it could be connected to soaring Metro Vancouver real estate prices.
“Is there a connection between these bonds and the ability of people to evade the currency controls in China in order to buy Vancouver real estate?” asked then-housing critic David Eby.
The finance ministry at the time denied there was any way for the bonds to be used as leverage in the B.C. housing market.
Comments from the NDP on Friday struck a different tone from those made in opposition.
“Raising capital in the Chinese market helps to strengthen our international trade and financial profile,” said Finance Minister Carole James in a statement. “Diversifying our financial, trade, and export relationships can translate into jobs here at home for B.C. businesses.”
B.C. was the first sovereign government outside of China to win approval to establish a Panda Bond system, getting the green light in 2015.
-With files from Justin McElroy
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