Chinese Bonds: All you need to know

Find out about compelling opportunities in China's bond markets and the trends shaping China's economy in 2018.

09 Jan 2018

As we move into 2018, we’re reflecting on air miles clocked up and numerous client meetings all over the world in 2017.

Importantly, we’re evolving our understanding of how China’s new five-year plan will impact the macro outlook of the world for the foreseeable future.

Our clients have asked the same questions repeatedly on China’s bond market opening up; hence we will focus on highlighting the opportunities for the year ahead.

Are onshore bonds freely tradeable?

Yes. Access has changed during the past year and institutional investors have unlimited access to China’s markets. This marks a major change from 2016, when free access was limited to sovereign wealth funds and central banks. You no longer need to apply for quotas.

The Bond Connect, started in July 2017, offers an alternative for smaller investors to invest in China’s onshore bond market, and marks the latest stage of China’s integration with global financial markets.

Will the RMB internationalize any time soon?

Yes, the inclusion of the Renminbi (RMB) in the IMF's SDR basket from September 2016 was a milestone development. Additionally, reforms to the domestic money market, opening of the stock and bond markets through the Connect programs, introduction of a RMB-denominated international payments system, expansion of Free Trade Zones across China, new overseas centers for RMB clearing, and new currency swap agreements, show RMB internationalization is progressing.

Download the full report for further insights, including our view on China's economy and bond markets in 2018.

Important legal information

To proceed, please confirm that you are a professional / qualified / institutional client and investor.

Views and opinions expressed are presented for informational purposes only and are a reflection of UBS Asset Management’s best judgment at the time a report or other content was compiled. UBS specifically prohibits the redistribution or reproduction of this material in whole or in part without the prior written permission of UBS and UBS accepts no liability whatsoever for the actions of third parties in this respect. The information and opinions contained in the content of this webpage have been compiled or arrived at based upon information obtained from sources believed to be reliable and in good faith but no responsibility is accepted for any errors or omissions. All such information and opinions are subject to change without notice but any obligation to update or alter forward-looking statement as a result of new information, future events, or otherwise is disclaimed. Source for all data/charts, if not stated otherwise: UBS Asset Management.
Any market or investment views expressed are not intended to be investment research. Materials have not been prepared to address requirements designed to promote the independence of investment research and are not subject to any prohibition on dealing ahead of the dissemination of investment research. The information contained in this webpage does not constitute a distribution, nor should it be considered a recommendation to purchase or sell any particular security or fund. The materials and content provided will not constitute investment advice and should not be relied upon as the basis for investment decisions. As individual situations may differ, clients should seek independent professional tax, legal, accounting or other specialist advisors as to the legal and tax implication of investing. Plan fiduciaries should determine whether an investment program is prudent in light of a plan's own circumstances and overall portfolio. A number of the comments in the content of this webpage are considered forward-looking statements. Actual future results, however, may vary materially. Past performance is no guarantee of future results. Potential for profit is accompanied by possibility of loss. 
© UBS 2020 The key symbol and UBS are among the registered and unregistered trademarks of UBS.