Mind the gap - Chinese vs G7 Bond Yields Conundrum

In previous papers, we addressed the low correlation of Chinese yields with G7 yields, since the global financial crisis (GFC), and notably during the COVID-19 crisis, and how China’s inclusion into the World Government Bond Index (WGBI) may increase this correlation.

A related, but different, issue is why Chinese government bond yields remain well above G7 yield levels, particularly as Chinese government bond yields were lower than US Treasury yields in the early-2000s. In this paper, we explore several factors that have caused Chinese government bond yields to stand well above G7 yields, particularly since the GFC.

You can now read the full whitepaper at the link below