Alongside the recent collapse in G7 bond yields, as the COVID-19 crisis has developed, Chinese government bond yields have backed up in recent months, reflecting PBOC caution in cutting interest rates.
Despite the growth in the Chinese government bond market since the GFC, the market still has a very low level of foreign participation, at less than 10%, as Chart 1 shows. This compares with more typical foreign ownership levels around 30% in developed markets like UK gilts.
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