According to IFR, what is called the Bao Dao bond - named after the Chinese words for “treasure island”, a popular reference for Taiwan – has been issued less than four months after Taiwan introduced an offshore Renminbi business.

RMB deposits in Taiwan have shot up from zero to RMB60 billion since banks were first allowed to accept them in February this year, IFR said.

The publication noted that the sheer speed of Deutsche’s debut underlines the enthusiasm for renminbi investments in the domestic Taiwanese market, while there is speculation that the bank will use the cheap funds to support the development of offshore RMB business in Germany.

Taiwan’s offshore renminbi bonds are separate from the main Dim Sum market, and withholding tax of up to 17 per cent on overseas institutional investors means the investor base is entirely local, the publication added.

The RMB debt issue by Deutsche Bank adds to a picture of a rapidly expanding market for securities priced in this currency. As explained in this publication by HSBC Private Bank recently, the expansion is driven in part by the desire of China to make the RMB and internationally traded currency, and ultimately, a reserve currency. (To view that article, click here.)

At present, the offshore bond market is expected to reach RMB350 billion ($56 billion) of issuance by the end of this year, up from RMB275 billion in 2012, HSBC has argued as recently as April. The offshore RMB market already works as a platform for renmbini activities by non-residents; in Hong Kong, such deposits in the currency surpass RMB800 billion, while the offshore RMB, or “Dim Sum” bond market amounts to RMB260 billion (Source: Bank for International Settlements). These amounts, while big, are still dwarfed by the multi-trillion size of the dollar and euro debt markets, for example.