Foreign interest in onshore China bonds still seen growing

Sino-US trade tensions and rising defaults won't scare off foreign investment in the onshore China bond market just yet -- not with index inclusion looming and more tax incentives.

Growing China-US trade tensions and the increased number of defaults among Chinese companies and Local Government Financing Vehicles LGFVs will not put an end to foreign investment in China’s bond market, which has barely begun to scratch the surface.

If anything, it can only grow, say regional economists and credit market experts, as international funds are drawn to China by increased issuance, favourable policies and the onshore market's inclusion in key global benchmarks.

According to official government data, China’s onshore bond market was worth Rmb64.57 trillion $9.4 trillion at the end of last year. It is the world’s third-largest...

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