Beijing Impact

As a worldwide symbol of globalization, it seems a fitting choice by China’s policy makers to select McDonald’s for its first bond sale.

McDonald’s announced on Thursday that it would be the first foreign, non-financial company to sell yuan-denominated bonds.

The Oak Brook, Illinois-based company will raise 200 million yuan ($29 million) with three-year bonds offering 3% interest.

Although the deal is far from a ‘Super Size’ transaction, it does mark another step in China’s efforts to relax its currency controls and perhaps eventually allow the yuan, or renminbi as it’s often called, to become freely convertible.

China's foreign exchange regulator Wednesday pledged to continue efforts to manage illegal capital inflows in the second half of the year.

In a statement on its website, the State Administration of Foreign Exchange (SAFE) said it had investigated up to 3.5 million cases of international trade transactions, involving a total of $440 billion, during its hot money monitoring campaign, which began in February.

The ultimate goal of China's exchange rate reform is to make the yuan a fully convertible currency, Yi Gang, head of the State Administration of Foreign Exchange (SAFE), said Friday. Yi, also deputy governor of the People's Bank of China, the central bank, made the remarks in an interview with Caixin media's China Reform magazine, which is posted on the SAFE website.

"There is no official timetable for a convertible yuan," he said in the interview with the magazine's executive editor Hu Shuli.

The Chinese currency, or the RMB, still shoulders the pressure of appreciation albeit the pressure has eased, as the value of the currency drew close to the equilibrium level after adjustments in the past decade, Yi said.

China will not bow to pressure from the outside world on revaluing the Renminbi and any changes in the nation's foreign exchange will be made on China's own terms, Chinese officials heading to the G20 summit in Toronto said at a press briefing.

The remarks come on the heels of US senators sending proposals to the Obama administration last Thursday calling for fresh pressure on China to allow more flexibility of its currency and a large-scale appreciation, despite the Chinese government's announcement on its foreign exchange reform last weekend.