Tread Warily Into China’s Massive Bond Market
Foreign interest is rising fast, even as defaults and yields head upward
Chinese domestic bonds may once have been the world’s biggest market that no one paid attention to. No longer. Mounting defaults and steepening yields have raised doubts about the $12 trillion market’s health, just as China’s economy shows signs of faltering. All the same, foreign investors have been piling in this year. Are they headed for a rude awakening?
Stress is rising, for sure: Chinese companies have defaulted on $2.9 billion worth of bonds this year, almost as much as in all of 2017, according to Wind Info data.
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