By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Latest World News UpdateLatest World News UpdateLatest World News Update
  • Home
  • Business
  • National
  • Entertainment
  • Sports
  • Lifestyle
  • Health
  • Science
  • Tech
  • World
  • Marathi
  • Gujarati
  • Hindi
  • Press Release
    • Press Release Distribution Packages
Notification Show More
Font ResizerAa
Latest World News UpdateLatest World News Update
Font ResizerAa
  • Home
  • Business
  • National
  • Entertainment
  • Sports
  • Lifestyle
  • Health
  • Science
  • Tech
  • World
  • Marathi
  • Gujarati
  • Hindi
  • Press Release
    • Press Release Distribution Packages
Follow US
Latest World News Update > Blog > World > China’s bond market signals economic pessimism – World News Network
World

China’s bond market signals economic pessimism – World News Network

worldnewsnetwork
Last updated: December 17, 2024 12:00 am
By worldnewsnetwork
Share
6 Min Read
SHARE

Taipei [Taiwan], December 17 (ANI): China’s bond market is signalling growing concerns about the country’s economic recovery, with analysts noting record-low bond yields and a widening gap compared to other economies, such as Japan. Investors are betting that there will be no quick recovery, even as the equities market seems to be rallying based on expectations of a rebound in consumption,as reported by Taipei Times.
Despite the closed nature of China’s capital account limiting the broader economic forecasting value of the country’s massive 33 trillion yuan bond market, the persistent negativity reflected in its bond yields is undeniable.
The benchmark 10-year bond yield in China has dropped more than 80 basis points this year, reaching a record low of 1.78 per cent. This suggests a banking system flush with cash and widespread expectations for slow growth, accompanied by low inflation.
“The bonds are basically saying that, yes, there is a [stock market] rally out there, but we don’t buy this rally for the long term,” said Bhanu Baweja, Chief Strategist for UBS Investment Bank in London. He further added, “Bonds are saying that this is not an earnings-based rally, this is not a reflation-based rally.” This stark contrast between the bond market’s pessimism and the bullish mood in equities highlights a fundamental divide in investor outlooks for China’s economy.
While China’s bond market continues to face challenges, including the long-term downward pressure on yields, the equity markets have seen growth, in part fuelled by government assurances of economic support. Since September, as China has cut interest rates and made efforts to stabilise its financial and property markets, equities have rallied, driving up price-to-earnings ratios. This has driven up optimism in some quarters, but the bond market’s more cautious stance reflects scepticism about a sustainable recovery, reported Taipei Times.
“The Chinese bond yields should be lower if they were to reflect the current economic situation in the country,” said Edmund Goh, Investment Director of Fixed Income at ABRDN in Singapore. According to Goh, China’s property market woes and the government’s determination not to create another property bubble make meaningful inflation unlikely in the near future, which continues to weigh on bond yields.
Meanwhile, the economy’s overall sluggishness is reflected in slower-than-expected growth, with China reporting just 4.6 per cent growth in the third quarter of 2024, a figure far below the government’s initial target of 5 per cent for the year.
At the same time, the bond market continues to face pressure from a lack of alternative investment options. With Chinese banks holding more than 300 trillion yuan in deposits and with loan growth stagnating, much of this capital has flowed into money markets and government bonds, further pushing down yields.
“Onshore lenders are facing the question of whether to give out loans to businesses or to play it safe with risk-free Chinese government bonds,” said Clarissa Teng, Fixed Income Allocation Strategist at UBS Global Wealth Management in Hong Kong. “Many are doing the latter, especially given that credit demand from households and corporates has been soft as well.”
Although some risks remain, such as a potential fiscal spending boost or higher inflation, analysts continue to predict that the bond market’s downward trajectory will persist unless significant policy changes are implemented.
“We’re struggling to find much reason to be pessimistic about the sovereign bond market,” stated analysts at Shanghai-based Shoupu Asset Management in a recent letter to investors. They added, “The facts of economic fundamentals are out there, and without strong, targeted growth-stabilising policies, there is little resistance to the decline in bond yields.”
As China’s central bank continues to intervene in the bond market by selling bonds to slow the rally, foreign investors, including BlackRock, have also reduced their exposure, taking profits after the prolonged bond rally, Taipei Times reported.
Still, some investors, like Li Kai, Chief Investment Officer of Beijing Shengao Fund Management, remain optimistic, forecasting a 10-year yield of 1.6 per cent for the next year.
Ultimately, as the Chinese government attempts to revive growth and stabilise its economy, the bond market’s subdued outlook will continue to weigh on expectations for the country’s economic recovery. (ANI)

Contents
WORLD MEDIA NETWORKPRESS RELEASE DISTRIBUTIONPress releases distribution in 166 countriesPress releases in all languagesPress releases in Indian LanguagesIndia PackagesEurope PackagesAsia PackagesMiddle East & Africa PackagesSouth America PackagesUSA & Canada PackagesOceania PackagesCis Countries PackagesWorld Packages

Disclaimer: This story is auto-generated from a syndicated feed of ANI; only the image & headline may have been reworked by News Services Division of World News Network Inc Ltd and Palghar News and Pune News and World News

sponsored by

WORLD MEDIA NETWORK


PRESS RELEASE DISTRIBUTION

Press releases distribution in 166 countries

EUROPE UK, INDIA, MIDDLE EAST, AFRICA, FRANCE, NETHERLANDS, BELGIUM, ITALY, SPAIN, GERMANY, AUSTRIA, SWITZERLAND, SOUTHEAST ASIA, JAPAN, SOUTH KOREA, GREATER CHINA, VIETNAM, THAILAND, INDONESIA, MALAYSIA, SOUTH AMERICA, RUSSIA, CIS COUNTRIES, AUSTRALIA, NEW ZEALAND AND MORE

Press releases in all languages

ENGLISH, GERMAN, DUTCH, FRENCH, PORTUGUESE, ARABIC, JAPANESE, and KOREAN CHINESE, VIETNAMESE, INDONESIAN, THAI, MALAY, RUSSIAN. ITALIAN, SPANISH AND AFRICAN LANGUAGES

Press releases in Indian Languages

HINDI, MARATHI, GUJARATI, TAMIL, TELUGU, BENGALI, KANNADA, ORIYA, PUNJABI, URDU, MALAYALAM
For more details and packages

Email - support@worldmedianetwork.uk
Website - worldmedianetwork.uk

India Packages

Read More

Europe Packages

Read More

Asia Packages

Read More

Middle East & Africa Packages

Read More

South America Packages

Read More

USA & Canada Packages

Read More

Oceania Packages

Read More

Cis Countries Packages

Read More

World Packages

Read More
sponsored by
Share This Article
Facebook Twitter Copy Link Print
Leave a comment Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Fast Four Quiz: Precision Medicine in Cancer

How much do you know about precision medicine in cancer? Test your knowledge with this quick quiz.
Get Started
APSEZ breaks records: Handles 420 MMT cargo globally, sets new milestones in March 2024 – World News Network

The company announced that it achieved its highest ever monthly cargo volumes,…

Stock market opens on a bullish note: Nifty-Sensex surge – World News Network

Simultaneously, the BSE Sensex followed suit, leaping by 317.27 points or 0.43…

IIHM Institute of Hospitality Skills (IIHS) opens largest training centre in Udaipur – World News Network

New Delhi [India], April 1: IIHM Institute of Hospitality Skills (IIHS), India's…

Your one-stop resource for medical news and education.

Your one-stop resource for medical news and education.
Sign Up for Free

You Might Also Like

NATO Chief says 2 per cent defence spending target “not nearly enough” – World News Network

By worldnewsnetwork

UN forecasts global economic growth to drop to 2.4% in 2025, China’s economy to 4.6% – World News Network

By worldnewsnetwork

“We are happy to see ceasefire… President is a peacemaker”: US State Dept official – World News Network

By worldnewsnetwork

Ex-FBI Director James Comey under probe following “8647” post; Trump officials call it death threat – World News Network

By worldnewsnetwork

Sports

Record prize money revealed for World Test Championship Final – World News Network
Sports
Inspired by Dangal, backed by dad’s faith, Rutuja Gurav wins wrestling gold on Khelo India Youth Games debut – World News Network
Sports

Popular Category

  • Business
  • Entertainment
  • Health
  • Lifestyle
  • National
  • Science
  • Sports
  • Tech
  • Videos
  • World
  • Marathi
  • Hindi
  • Gujarati
  • Press Release
  • Press Release Distribution Packages

Entertainment

Jeremy Allen White, Austin Butler leads Henry Dunham on crime saga ‘Enemies’ – World News Network
Entertainment
French actor Theo Navarro-Mussy banned from Cannes red carpet over rape allegations – World News Network
Entertainment
Latest World News UpdateLatest World News Update
Copyright © 2024 World News Network. All Rights Reserved
Welcome Back!

Sign in to your account

Lost your password?