Chinese Bond Market Sees Steady Growth in 2021 as External Opening Continues

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Official data from the Chinese central bank points to steady growth in the domestic bond market, amidst efforts to further open it up to foreign participants.

China saw the issuance of 61.9 trillion yuan in debt instruments in 2021, for year-on-year (YoY) growth of 8.0%, according to data released by the People’s Bank of China (PBOC) on 30 January.

The interbank bond market saw the issuance of 53.1 trillion yuan in bonds, for YoY growth of 9.2%, while exchange market issuance was 8.7 trillion yuan, for YoY growth of 1.0%.

Chinese government bond issuance was 6.7 trillion yuan, local government bond issuance was 7.5 trillion yuan, financial bond issuance was 9.6 trillion yuan, company credit bond issuance was 14.8 trillion yuan, asset-backed securities issuance was 88.153 billion yuan, and interbank certificate of deposit issuance was 21.8 trillion yuan.

As of the end of December 2021 the bond market trustee balance was 133.5 trillion yuan, for YoY growth of 16.5 trillion yuan.

This included an interbank bond market trustee balance of 114.7 trillion yuan, and an exchange market trustee balance of 18.8 trillion yuan.

As of the end of 2021 foreign institutions had a Chinese bond market trustee balance of 4.1 trillion yuan, including 4.0 trillion yuan on the interbank bond market.

Foreign institutions held 2.5 trillion yuan in government bonds, accounting for around 61% of their total holdings, while policy financial bonds were 1.1 trillion yuan, accounting for around 27%.