Goldman Sachs: China's bond market still has room for growth. In 2015-2025, foreign capital flowing in foreign capital reached 1 trillion US dollars

The 21st Century Economic Herald reporter Wu Bin reported that as the Fed continued to raise interest rate hikes to resist inflation, the US dollar strongly strengthened, this year emerging markets' attractive attraction to funds declined.

According to data from the International Financial Association (IIF), in July this year, non -resident investors withdrew 9.8 billion U.S. dollars from the emerging market investment portfolio. In the fifth consecutive month, the net outflow of investment portfolio funds was the longest time since 2005 Record. In the past five months, the total net outflow of emerging markets was 39.3 billion US dollars. Among them, the net outflow of investment portfolios that invested in China in July was US $ 6.4 billion, US $ 2.9 billion flowed out of the bond investment portfolio, and 3.5 billion US dollars flowed out of the stock investment portfolio.

But overall, the Chinese market is still tough, and foreign capital outflows from the Chinese bond market is only a temporary phenomenon. He Jianxun, director of the Asian Credit Strategy Research Department of Goldman Sachs Gao Sheng Global Investment Research, said in the China Credit Strategy Report published in late August that in 2022, the foreign capital outflow of the Chinese bond market is only a temporary phenomenon. $ 1 trillion.

He Jianxun also said that in the past year, regulators have focused on the credit bond market, launched a number of regulatory measures to improve the current scattered pattern of this field, and further open the door of investment to overseas investors.

China's bond market still has room for growth

In September 2015, the scale of China's domestic bond market was RMB 40 trillion. The Asian Credit Strategy Team of Goldman Sachs Global Investment Research Department predicted that the domestic bond market in China will increase to more than three times in 2015 by 2025, reaching to reach 2015, reaching to reach 2015, reaching to reach 2015, reaching to reach 2015, reaching to reach 2015, reaching to reach 2015, reaching to reach 2015, reaching to reach 2015, reaching to reach 2015, reaching to reach 2015, reaching to reach 2015, reaching to reach 2015, reaching to reach 2015, reaching to reach 2015, reaching to reach 2015, reaching to reach 2015, reaching to reach 2015, and reaching to reach 2015 136 trillion yuan. However, as of June 2022, the scale of China's bond market has exceeded the expectations at the time, reaching 13.8 trillion yuan, and the actual scale in the future is expected to exceed Goldman Sachs' re -adjustment at the end of 2025: 167 trillion yuan.

A series of structural reform measures have accelerated market expansion. The Goldman Sachs China Economic Research Team believes that the economic re -balance has affected China's financial structure: As the proportion of agriculture and industry's contribution to the economy decreases, the importance of bonds and stock markets has increased compared to bank loans in economies. The re -balance of China's economy will be the general trend of several years. These forces have promoted the growth of China's domestic bond market in the past decade, and may continue to play the main role in the future.

The scale of China's domestic bonds has increased steadily in the past ten years. According to He Jianxun's estimation, as of the end of 2021, the stock of bonds and debt financing instruments accounted for approximately 28.2%of China's overall non -financial debt, which was significantly increased compared to 17.5%at the end of 2014. He Jianxun believes that reducing the high dependence on bank loan financing, enterprises, especially private enterprises, have great potential for the development of financing through bond market financing, and have significant room for growth in the market for Chinese bonds and debt financing instruments.

2015-2025 Foreign capital inflows reached $ 1 trillion

The inflow of foreign investors' funds has increased steadily in the past five years, but the trend has reversed in 2022, and the cumulative cumulative $ 78 billion has been flowing since February. He Jianxun believes that the narrowing spread of China and the United States, the pressure of RMB, and the overall flow of funds from various types of assets such as emerging markets are the causes of this situation. Although the short -term fluctuations in the market are also a factor in the outflow of China's bond market funds this year, Goldman Sachs New Market Research Team believes that the outflow speed will slow down and restore the support of structural needs to recover. Global Central Bank's increase in foreign exchange reserves in China's fixed income market is the main source of inflow funds. Therefore, Goldman Sachs reiterated that the extension of foreign investment in China's domestic bond market from 2015-2025 will reach $ 1 trillion.

The larger and liquid domestic bond market will provide richer investment assets for the diversified foreign reserves of foreign central banks. In addition, China has a lot of promise in increasing foreign investors to participate in the domestic credit bond market. As of June 2022, foreign investors held 9.9%of Chinese government bonds and 4.1%of policy bank financial bonds, but the investment in credit bonds was very small.

At present, credit bonds are supervised by the CSRC, the State Development and Reform Commission, and the China Banking Market Dealers Association. They are traded through three channels: three channels of interbank markets, exchanges and commercial bank counters. Foreign investors can invest through three paths of direct investment, bonds, qualified foreign institutional investors and qualified foreign institutional investors through the inter -bank bond market. It can be said that the domestic credit bond market pattern is still scattered. In the past 12 months, a number of regulatory measures have been introduced in China, which aims to straighten out multiple markets and improve decentralized patterns. Specifically, the construction of the inter -bank bond market and the exchange of the exchange bond market interconnection, further open the exchange market to overseas investors And launch a swap mechanism.

Looking forward to the future, the credit bond market has more reforms and opening up. He Jianxun said that there are still significant differences in important areas such as investors' protection, differentiated rating, market liquidity, and default disposal mechanism in the domestic bond market. There is still room for the development of the domestic credit bond market. Gradually participate in the domestic credit bond market in a step -by -step manner.

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