Global investors may spur change in China’s debt market

THE imminent arrival of a new group of investors in China’s domestic bonds is set to strengthen the hand of reform advocates in the world’s third-largest debt market.

With overseas holdings already at record levels, the April 1 inclusion of a slice of China’s near-US$13 trillion of onshore bonds in a key global index will usher in fund managers who use the benchmark to assemble their portfolios. Strategists see US$100bil or more flowing in in 2019 and for years to come. That will make the foreign investor community an increasingly significant stakeholder in China’s financial system.