Index, ratings deficits hold back China bond market

Foreign investor interest in the world's third-biggest bond market is growing. But that interest is capped until China develops a reliable credit market and is included in benchmark indices.

Interest in the $9 trillion-plus Chinese onshore bond market is building but it's still early days for foreign investors. In the second of our two-part series, we look at other factors holding back international demand, in addition to currency-related concernsnamely, bond indexes and credit ratings.

Some of the most prominent index providers announced earlier this year that Chinese onshore bonds would be included for the first time. However, in the end they were only added to especially extended global indices, or emerging marketregional indices, rather than the most widely tracked benchmark global indices. 

On March 1, Bloomberg said it was launching two...

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