China's finance ministry said Tuesday that raising funds was not the main purpose of its plans to issue two billion U.S. dollar-denominated sovereign bonds, the first such sales in 13 years.
Backed by sustained economic growth and ample foreign exchange reserves, the government does not have strong needs for external financing, the ministry said on its website.
The debt issuance will help internationalize the country's financial system, set up a pricing benchmark for its foreign currency-denominated bonds, help international investors better understand the economy, and balance the structure of its external debts, the ministry said.
The outstanding sovereign external debt of China stood at 18.1 billion dollars at the end of 2016, accounting for 1.06 percent of its national debt and far below the international average.
The ministry said early this month that the central government will sell 1 billion dollars worth of five-year notes and 1 billion in 10-year notes in Hong Kong, but did not provide the specific date.
This will be the country's first U.S. dollar sovereign bond sales since October 2004, when the country raised a total of 1.7 billion U.S. dollars by issuing dollar- and euro-denominated bonds with maturities of five and ten years.
Commenting on Moody's and S&P Global Ratings' downgrade of the country's sovereign credit rating, the ministry said it was a misreading of the sound economic fundamentals and development potential, while international investors will have an objective evaluation of the country's sovereign credit situation.