Why German issuers are turning to China’s panda bond market in 2026

Panda bonds- renminbi-denominated bonds issued by foreign companies in China - are gaining traction as a stable funding alternative.

Against a backdrop of geopolitical tensions, China’s renminbi bond market has emerged as a source of stability for global issuers. Volatility across G3 primary markets (where governments and corporates issue bonds in US dollars, euros and Japanese yen) has intensified, driven by heightened uncertainty as a result of the Middle East conflict, fluctuating energy prices and rapidly shifting interest rate expectations. As a result, bond issuance windows in major currency markets have become shorter and less predictable. By contrast, renminbi-denominated primary markets have demonstrated periods of relative stability, enabling clients to maintain consistent access to funding through panda bond issuance.

This trend has gathered significant momentum in 2026, with overall issuance in the panda bond market almost doubling year-over-year, exceeding 1 trillion renminbi by early April⁽¹⁾.

Why German issuers are leading panda bond issuance

German corporates are particularly active given their significant onshore operations in China, where local currency funding provides a natural hedge against renminbi revenues.

German companies have become one of the most active groups of foreign issuers in the panda bond market, with automobile manufacturers such as Volkswagen, Mercedes-Benz and BMW, and chemical companies including BASF and Henkel all accessing the market in recent years. What began as selective issuance has evolved into a broader funding trend, reflecting both their industrial footprint in China and the growing maturity of panda bonds as a product, which are increasingly becoming an integral part of treasury strategies for key German multinationals.

At the centre of this development is Deutsche Bank, which is both actively issuing its own panda bonds and supporting clients as a leading underwriter.

Deutsche Bank’s dual role: issuer and partner

Deutsche Bank has continued to build momentum as an issuer in 2026, completing two panda bond transactions this year. Deutsche Bank’s 2026 panda bond milestones include:

• 5.5 billion renminbi issuance in March - the largest ever by a foreign bank
• 3.5 billion renminbi multi-tranche issuance in June - achieved record-low coupons for a foreign issuer
• Strong oversubscription, reflecting robust investor demand

Deutsche Bank continues to leverage its top-ranked China onshore debt capital capabilities to support clients as a trusted underwriter. So far this year, Deutsche Bank has helped Henkel, Volkswagen and Mercedes-Benz with panda bond issuances of CNY 3 billion each, for a total of CNY 9 billion. The bank has also issued CNY 9 billion in panda bonds for its own funding needs, supporting global activities and demonstrating its underwriting and placement expertise.

This leadership is demonstrated by Deutsche Bank’s ranking as the top foreign bank supporting bond issuance in China, ranking #1 across both the overall onshore bond market and the panda bond market for foreign issuers for six consecutive years(1).

This dual capability reinforces Deutsche Bank’s position as a bridge between European corporates and China’s capital markets - enabling clients to navigate a complex but increasingly important funding landscape.

From an underwriter's perspective, we are seeing panda bonds shift from being a tactical option to a strategic component for many of our multinational clients. The appeal is the creation of a natural hedge, aligning local currency debt onshore operations and revenue streams. Samuel Fischer, Head, China Onshore Debt Capital Markets, Deutsche Bank

"This strategic integration, coupled with a stable funding environment and favourable financing costs, allows companies to diversify their funding sources and build a more resilient global treasury architecture for the long term," said Fischer.

¹⁾ According to data by WIND