China’s WGBI entry will confirm its arrival as a global market

China’s arrival in global indexes changes the nature of the asset allocation decision for global investors benchmarked against them. Investors may now need reasons to justify not investing strategically in Chinese government bonds, rather than a justification for doing so tactically when they were not included in benchmark indexes.

Since foreign holdings of Chinese government bonds have been low historically, there is the potential for them to rise significantly.

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