HONG KONG - Sale of China's first US dollar-denominated debt in 13 years indicates China will further open up its finance sector, said Chinese Vice-Minister of Finance Shi Yaobin here on Friday.

Demand for the sovereign notes climbed to 11 times of the offering size on Thursday. The strong demand allowed pricing of the $2 billion in bonds to go under initial guidance, meaning China could raise funds at lower cost.

But external financing is not the purpose as the offering was small, Shi said.

Choosing Hong Kong as the venue to float the bonds indicates the central government's solid support for Hong Kong in bolstering its role as international financial center, he noted.

It can also create interest-rate benchmarks for the mainland's enterprises to raise funds in global bond markets, according to Shi.

The issuance can also help international investors to better know, understand and invest in China, he said.

With strong demand, the five-year bonds were priced to yield 2.196 percent, or just 0.15 percentage point over comparable US Treasury notes. The 10-year bonds were priced to yield 2.687 percent, or 0.25 percentage point above Treasury yields.

Though the bond sale had no rating, the interest rates were equivalent to those with triple-A sovereign rating, he said.

The successful floating of the bond indicates investors' positive prospects for China's economic growth and financial stability, Shi said.

China will unswervingly boost further opening-up of the financial sector and explore to build a long-term mechanism for selling sovereign bonds denominated in foreign currencies, he noted.

The previous such sales were made in October 2004, when the country raised a total of $1.7 billion by issuing dollar- and euro-denominated bonds with maturities of five and 10 years.