Russia and China are close to another milestone of co-operation with the placement of an offshore renminbi bond in Russia by the Russian finance ministry that would open new funding options for the country’s issuers and bring Chinese investors one step closer to Russia’s equity market.

People involved say preparations for the issue are nearing completion and it should happen early next year — despite volatility in global bond and equity markets after the UK’s vote to leave the EU in June and Donald Trump’s victory in the US presidential election last month.

Under the proposal, first floated in December last year, the Russian finance ministry would issue Rmb6bn ($1bn equivalent) of bonds with multiple maturities to be listed on the Moscow Exchange (MOEX). This would establish benchmarks for a new funding option for large parts of Russia’s economy shut out of foreign-currency bond markets by western sanctions and give China a central role in making this possible.

“Despite the uptick in global interest rate levels since the US elections and the looming US Fed funds rate hike in December, the interest for this deal from the Chinese mainland investment banks is still very high,” said Andrei Akopian, managing partner at Russian-Chinese advisory business Caderus Capital. Caderus was appointed MOEX’s official representative for China in February 2016.

In a joint statement following a meeting of Russia’s prime minister Dmitry Medvedev and his Chinese counterpart Li Keqiang in early November, Beijing underlined its support for the issue. Mr Akopian said this was “the last missing piece of the puzzle” to obtain the necessary regulatory clearance for the issue and towards making Moscow an offshore centre for the renminbi.

Mr Akopian said a number of Russian companies were lining up to issue renminbi bonds in Russia and help establish what he called a “Baikal bond” market.

In September, Caderus reached agreement with BCS Global Markets, the largest securities broker on the MOEX, in a bid to bolster cross-border investment by attracting Chinese private and institutional money to the Russian market through BCS’s investment platform.