Foreign investors held a record amount of China bonds – 2.51 trillion RMB ($354.5 billion) – at the end of June, according to FTSE Russell calculations using official data from China Central Depository and Clearing Co and the Shanghai Clearing House. Despite the coronavirus, in H1 2020 foreign buyers increased their RMB bond holdings by 14.6%.
As 2020 enters its back half, the People’s Bank of China (PBOC) continues to maintain its steady approach in an effort to avoid another credit crunch such as the world saw in the global financial crisis (GFC). On that score, China has only cut interest rates modestly (by 30bps to 2.95% on the one-year medium-term lending facility) since the Covid-19 crisis began.
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