At more than $6trn, China’s bond market is now the third largest in the world. In March 2016, the quotas that restricted external institutional investment were lifted. Could this liberalisation mean more Chinese bonds in international indices and portfolios? It would be reasonable to expect as much.
Support for the currency, a huge and newly opened bond market and continued growth place China well in the eyes of any asset allocator or stock selector. Adding those to the compelling opportunities available in the Asean nations (plus India) could provide an answer to the low yields pervading more established markets.
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Endre Pedersen is chief investment officer, fixed income, Asia at Manulife Asset Management
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