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The Chinese Bond Market

Jean-Paul Tchang Statisticien-Économiste, WST Conseils.

The surge of the Chinese bond market is recent. The Chinese State only started to issue debts in 1979. Limited volume of bonds were issued till 1987 and sold by administrative allocation. Secondary market experiences took place in 1987. After 1991, the Finance Ministry selected primary dealers for bond issuing. It is only after the creation of a centralised depository and clearing company, CDC, in 1996, and the opening of an inter-bank bond market in 1997 that the market gathered momentum. Presently it covers all segments of the yield curve and has become the second largest source of funding for the Chinese companies. The development of the Chinese Bond market follows the logic of Asian Bond Market Initiative. New offshore RMB bonds in Hong Kong is part of a move toward the internationalisation of the Chinese currency, which is being prepared by reforms and opening of the Chinese capital markets.

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