Quarterly China bond research report

Category: Industry/Sector Analysis

Country or region: China

China's $12 trillion bond market is projected to double in size in the next four years. In the meantime, the renminbi has depreciated and sovereign yields continue to fall. What's the outlook for 2019?

Reference URL: https://www.ftserussell.com/files/research/ftse-russell-china-bond-research-report-q4-2018


  • China’s US$12 trillion bond market is projected to double in size in the next four years to about US$24 trillion, according to Goldman Sachs. Chinese Government Bonds (CGBs) are forecast to account for an estimated US$4 trillion of that market by the end of 2022
  • Despite growth in its bond market, China’s currency – the renminbi (RMB) – is depreciating on the back of trade tensions and slower macroeconomic growth. The RMB hit a 10-year low in late October 2018; and the interest rate gap between China and the US narrowed due in part to the Federal Reserve’s tightening policies
  • Meanwhile, yields on sovereign debt continue to fall in China at a time when yields on similar debt of many other major economies are rising due to an uncertain outlook for the global economy. As of end-2018, the yield on China’s 10-year sovereign notes had tumbled 63bps since the beginning of last year

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