China Bond Market: Liquidity And Risk Appetite Rising

China has buoyed investor sentiment in the country. While the government is focused on deleveraging the economy and providing localized support to assuage default concerns, which were rising last year, Jason Tan of CreditSights says that credit risk has increased amongst property developers and smaller banks.

As onshore liquidity is still supportive, and offshore liquidity via channels such as China Bond Connect is also growing, financing costs are being kept low and so investors are gathering comfort about Chinese debt in their search for yield.

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