Mar 22, 2021 (China Knowledge) - Data published by any financial terminals shows, in just a short span of two years, foreign holdings of China’s government bonds nearly doubled to over RMB 2 trln (USD 300 bln) as of Feb 2021.

In contrary to the U.S government bonds’ yield of 1.7%, the Chinese government bonds have a yield of over 3.2%, which sparked many investors’ interest in the Chinese bonds due to the significant differences in the yield rates. In addition, the increased interest also came from Chinese bonds being added to major investment indexes. For example, Chinese bonds are now being included in the Bloomberg Barclays Global Aggregate Index that could result to a RMB 150 bln of foreign inflows into China’s debt market.

JP Morgan Asset Management’s China Bond Opportunities Fund manager Jason Pang noted that there are not any indicative red flags to stop investors to buying into China’s market. Pang also pointed out that the Chinese economy has recovered from the pandemic much faster than other countries, lowering a probability of bond sell-off as compared to other countries.

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