In the last decade, China’s economy has grown at a rate of around 10% on average and its bond market has grown from virtually nonexistent into one of the world’s largest. However, investors seeking access to China’s strong growth via the bond market continue to face hurdles, including a lack of familiarity with the range of bonds available, restrictions on who can invest and how, and other aspects of the Chinese bond market. In this document, we discuss some of the key elements of China’s growing bond market.
As China's economy has grown, the country has developed a large and increasingly diverse market that includes both public and private debt (Fig. 1). China's bond market is now the third largest in the world at about 35.89 trillion Renminbi (RMB), or about USD 4.24 trillion (Fig. 2).
Fig. 1: China's bond market growth over the last 10 years.
Source: Wind, as of December 2014
Fig. 2: China's bond market is now the third largest in the world.
Source: Bank for International Settlements, as of June 2014