monthly report
China seeks growth quality upgrade after persistent property weaknes
China expands fiscal support in 2024 by issuing special government bonds, in addition to monetary policy stimulus. Chinese bond yields fell further in Q1 on monetary easing, but wide rate differentials drove sovereign spreads lower and a weaker yuan. Indian government bonds outperformed, helped by a resilient rupee.
Key highlights:
- Macroeconomic backdrop − China aims to transform to high-quality development, with expansionary fiscal policy support
- Chinese bonds − Chinese sovereign yields fell across the curve in Q1, as onshore spreads narrowed
- Chinese and Asian bonds − Asian yield moves were mixed; Chinese spreads versus G7 fell back in Q1
- Performance − Indian bonds outperformed in Q1, while JGBs lagged on a weaker yen and monetary tightening
This report provides actionable insights on currency-adjusted performance, macro drivers, shifts in yields, spreads and curves across conventional government and corporate bonds, for both renminbi and dollar-denominated issues.
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