Slovenia has announced plans to issue up to RMB 5 billion ($700 million) in panda bonds next year, marking a strategic move to strengthen its financial links with China and diversify its investor base amid growing global trade tensions.
Finance Minister Klemen Boštjančič, speaking during a recent visit to Beijing, said the planned issuance of renminbi-denominated sovereign bonds would help Slovenia access new pools of capital and establish a stronger presence in Asian markets. “We want to expand the investor base,” he told the Financial Times, emphasizing that the move reflects Slovenia’s commitment to openness and adaptability in an increasingly divided global economy.
Strengthening Economic Bridges Amid Global Tensions
Slovenia’s decision comes at a time when geopolitical and trade tensions between the United States and China are reshaping global commerce. Washington’s tariffs and Beijing’s export controls on key materials have disrupted supply chains, placing smaller economies under pressure.
“This is something the world hasn’t seen for maybe 100 years,” Boštjančič said. “For small, open economies like ours, it’s especially challenging.”
He added that smaller EU nations cannot afford to wait for broader European consensus before acting. “We increased bilateral meetings with Chinese officials because we cannot wait. We have to protect our own interests.”
A Growing Market for Panda Bonds
Panda bonds—Chinese yuan-denominated bonds issued by foreign entities in China—have become an increasingly popular financing tool for international corporations and some sovereign states. Countries such as Portugal, Hungary, and Egypt have previously tapped into the Chinese bond market, seeking to benefit from lower borrowing costs and closer financial integration with Asia.
For Slovenia, this step follows a pattern of financial innovation. The country was among the first to issue blockchain-based bonds and sustainability-linked debt, and Boštjančič described the panda bond issuance as a “logical next step” after the success of Slovenia’s Samurai bonds in Japan.
“This opens the market,” he said. “It brings the financial world closer together. More panda bonds should follow, maybe on a yearly basis. It’s not just one event — we want to remain on the market.”
Europe’s Industrial Challenge
Beyond financial strategy, Boštjančič also reflected on broader shifts in global industrial policy. He warned that Europe risks falling behind as China and the United States move swiftly to support their domestic industries through targeted subsidies and flexible fiscal measures.
“The big question for Europe is how to cope, how to compete, when the playing field is very different in China or the US,” he said. “Europe hasn’t been adapting to this, and that’s a big question we have to answer.”
He suggested that the European Union might need to reconsider its deficit and spending rules or develop new programs to enhance competitiveness. “Countries like the US and China can react very quickly and don’t have the same limitations. Most of Europe’s constraints are self-imposed,” he noted, pointing to the continent’s struggling car industry as an example.
“For part of the European automobile industry, it’s probably too late. We wait too much. The rest of the world doesn’t wait,” he warned.
A Call for Bolder European Action
While Boštjančič acknowledged that subsidies could help Europe stay competitive, he cautioned against reactionary spending. “We shouldn’t just push money into industries because the Chinese are doing this,” he said. Instead, he called for long-term strategic decisions to safeguard Europe’s industrial future.
“Europe must be able to make much bolder decisions than it used to in the past,” the minister concluded. “Otherwise, we risk being left behind — and driven over.”
