China’s Government Bonds

Citigroup just announced that it plans to include Chinese government bonds in a few indices tracking government debt in emerging economies across the region. This news comes on the heels of Bloomberg announcing that the Bloomberg Barclays bond indices would do the same thing. This newsletter will provide a data-driven examination of China’s government bond market.

Total Value of Government Bonds

As of March 8, 2017, China’s bond market is valued at 65.7 trillion RMB ($9.5 trillion USD). Government bonds account for 18.4% of that value (12.1 trillion RMB or $1.75 trillion USD), making them the second highest represented classification of bonds behind Financial bonds.

Where are Government Bonds Traded?

Over 98% of the government bond transactions happen on the interbank market. A small amount is also traded on the stock exchanges (both Shanghai and Shenzhen), bank counters and other places. The majority of government bonds are cross-listed on both the interbank market and the stock exchanges (usually both SSE and SZSE).

Investor Structure

Although commercial banks remain the largest holders of government bonds, other participants have been increasing their investment in China’s government bond market. Thanks in large part to China eliminating the quota requirement and simplifying the process for qualified foreign investors to participate in the interbank bond market, foreign investors’ government bond holdings reached 418 billion yuan in February 2017, which is a 65% increase from a year ago.


The spread between the China and US 10 year treasury bond has been narrowing down in the past several years. On the narrowing spread, Founder CIFCO Futures explains that looking forward, China has a positive macro perspective but also faces inflation and deleveraging pressure in medium term.

If you have any questions regarding the data, feel free to reach out to the authors:

Xinyan (Stella) Li
Max Schoenfeld

  • Shanghai (headquarter)
  • Hong Kong
  • New York
  • London
举报电话:+86 400-820-9463举报邮箱