Primary Market - A total of 34 offshore bonds were issued this week (September 22 - September 26, 2025), including 10 offshore RMB bonds, 19 USD bonds, 3 HKD bonds, 1 EUR bond, and 1 AUD bond, with issuance scales of 68.087 billion RMB, 2.63 billion USD, 1.585 billion HKD, 130 million EUR, and 250 million AUD [1] - The largest single issuance in the offshore RMB bond market was 1 billion RMB by Shanghai Fosun High Technology (Group) Co., Ltd., while the highest coupon rate for RMB bonds was 6.4% issued by Pengze County Urban Development and Construction Group Co., Ltd. [1] - In the USD bond market, the largest single issuance was 500 million USD by CK Hutchison Holdings Limited, with the highest coupon rate of 4.73% issued by Dongfang Securities Co., Ltd. [1] Secondary Market - The yield on Chinese USD bonds mostly declined this week, with the Markit iBoxx Chinese USD Bond Composite Index down 0.09% to 249.14, and the investment-grade USD bond index down 0.07% to 237.93 [2] - The high-yield USD bond index increased by 0.23% to 241.15, while the real estate USD bond index fell by 0.55% to 155.62 [2] Benchmark Spread - As of September 26, 2025, the spread between the 10-year benchmark government bonds of China and the U.S. widened to 236.19 basis points, an increase of 3.78 basis points from the previous week [3] Rating Changes - Moody's withdrew the "Ca" family rating for Road King Infrastructure Limited on September 26 for commercial reasons [5] - Moody's confirmed the "Ba3" family rating for Melco Resorts & Entertainment Limited, changing the outlook from "stable" to "negative" on September 22 [5] Defaults and Extensions - Oceanwide Holdings announced that it plans to extend the maturity of its 134 million USD bond, which was due on September 23, to before March 23, 2026 [6] Domestic News - The total scale of domestic bond ETFs has surpassed 600 billion RMB, reaching 607.448 billion RMB as of September 22, 2025, marking a growth of over 2.4 times since the beginning of the year [8] - The People's Bank of China announced plans to accelerate the listing of RMB government bond futures in Hong Kong [9] - Shanghai Clearing House supported the issuance of the world's first private enterprise "Yulan Bond" by Shanghai Fosun High Technology (Group) Co., Ltd., with a scale of 1 billion RMB and an interest rate of 4.9% [10] International News - The International Institute of Finance reported that global debt reached approximately 338 trillion USD in the first half of 2025, a record high, driven by a loose global financial environment and weak dollar [12] Offshore Bond Alerts - Longfor Group announced that all of its outstanding corporate bonds will be suspended from trading starting September 29, 2025 [13] - Fantasia Holdings reported that approximately 84% of its existing noteholders have joined the debt restructuring support agreement [14] - New城控股 successfully issued 900 million RMB of medium-term notes with a coupon rate of 3.29% [15] - FWD Group plans to redeem two subordinated USD bonds totaling 1.65 billion USD on October 23 [16]

Core Insights - The Chinese bond market has experienced healthy and rapid development, significantly enhancing its international influence and attractiveness [1] - There is substantial potential for further opening of the Chinese bond market, with plans to accelerate the launch of RMB government bond futures in Hong Kong [1] Market Development - The proportion of net financing through bonds has increased from approximately 30% five years ago to over 40% currently [1] - The annual turnover rate of government bonds has risen from 2.4 to 3.8 over the past five years, indicating increased trading activity [1] - As of August 2025, the total balance of the Chinese bond market is projected to reach 192 trillion yuan, making it the second largest in the world [1] Investment Value - RMB bonds are showing strong investment value, with both short-term and long-term yields ranking among the highest globally [2] - The actual yield of RMB bonds remains relatively high even after adjusting for inflation, providing a good value retention and appreciation opportunity for global RMB holders [2] - RMB bonds exhibit low correlation with yields from G7 countries and other emerging markets, enhancing their diversification benefits [2] Liquidity and Trading Activity - RMB bond trading is active, with an average annual turnover rate close to 4 times for government and policy financial bonds, and some of the most active bonds seeing turnover rates near 150 times [2] - The bid-ask spreads for interest rate bonds have narrowed significantly, aligning closely with levels seen in developed markets [2] Foreign Investment and Market Access - Currently, foreign investors hold about 2% of the total bond market, indicating significant potential for further opening compared to developed economies [2] - Nearly 1,170 foreign institutional investors from around 80 countries have entered the Chinese bond market, with total holdings reaching approximately 3.9 trillion yuan, a nearly fourfold increase since the launch of the Bond Connect [3] Regulatory Support and Future Initiatives - The central bank is promoting the acceptance of mainland bonds as eligible collateral in Hong Kong and globally, enhancing their use in liquidity arrangements and derivative transactions [3] - Plans are in place to support various foreign institutional investors in conducting bond repurchase transactions in the Chinese bond market and to expand the "Swap Connect" quoting team [4]

Core Insights - The Chinese bond market has experienced healthy and rapid development, significantly enhancing its international influence and attractiveness [1][2] - There is substantial potential for further opening of the Chinese bond market, with plans to accelerate the launch of RMB government bond futures in Hong Kong [1][4] Market Development - The proportion of net financing through bonds has increased from approximately 30% five years ago to over 40% currently, indicating a growing role in overall social financing [1] - The annual turnover rate of government bonds has risen from 2.4 to 3.8 over the past five years, reflecting increased trading activity [1] - As of August 2025, the total balance of the Chinese bond market is projected to reach 192 trillion yuan, making it the second largest in the world [1] Investment Value - RMB bonds are showing strong investment value, with both short-term and long-term yields ranking among the highest globally [2] - The actual yield of RMB bonds remains relatively high even after accounting for inflation, providing a good value retention and appreciation opportunity for global RMB holders [2] Risk Diversification - RMB bonds offer significant diversification benefits, with low correlation to yields from G7 countries and other emerging markets [2] Liquidity and Trading Activity - RMB bond trading is active, with an average annual turnover rate close to 4 times for interest rate bonds, and some of the most active bonds seeing turnover rates near 150 times [2] - The bid-ask spreads for interest rate bonds have narrowed significantly, aligning closely with developed market levels [2] Foreign Investment - Currently, foreign investors hold only 2% of the total bond market, indicating considerable room for growth compared to developed and some emerging markets [2] - Nearly 1,170 foreign institutional investors from around 80 countries have entered the Chinese bond market, with total holdings reaching approximately 3.9 trillion yuan, a nearly fourfold increase since the launch of the Bond Connect [3] Regulatory Support - The central bank is working to make Chinese bonds widely accepted as eligible collateral in Hong Kong and global markets, enhancing their usability in various financial transactions [3] - Plans are in place to support foreign institutional investors in conducting bond repurchase transactions in the Chinese bond market [4]

Core Viewpoint - The Chinese bond market has experienced healthy and rapid development, significantly enhancing its international influence and attractiveness, while playing a crucial role in serving the real economy and optimizing financing structures [1][2]. Group 1: Market Development and Performance - The People's Bank of China (PBOC) emphasizes the substantial potential for further opening of the bond market, with ongoing support for the construction of Hong Kong as an international financial center [2][3]. - The net financing scale of bonds has increased from approximately 30% of total social financing five years ago to over 40% currently, indicating a more active bond trading environment [3]. - As of August 2025, the total balance of the Chinese bond market reached 192 trillion RMB, ranking second globally, with bond issuance exceeding 59 trillion RMB in the first eight months of the year, a 14% year-on-year increase [3]. Group 2: Investment Value and Yield - Chinese bonds offer high nominal and real yields, ranking among the top globally, with a 70% return on investment over the past decade, regardless of foreign exchange hedging [4]. - The actual yield of RMB bonds remains relatively high, providing a solid avenue for value preservation and appreciation for global RMB holders [4]. - RMB bonds exhibit low correlation with G7 and other emerging market bonds, highlighting their diversification benefits [4]. Group 3: Foreign Investment and Market Access - Currently, foreign investors hold only 2% of the bond market, indicating significant room for growth compared to developed and some emerging markets [5]. - As of August 2025, nearly 1,170 foreign institutional investors have entered the Chinese bond market, with total holdings around 3.9 trillion RMB, a nearly fourfold increase since the Bond Connect was launched [6]. - The trading volume of bonds by foreign institutional investors reached approximately 11.8 trillion RMB in the first eight months of the year, with the Northbound Bond Connect accounting for about 7.2 trillion RMB [6]. Group 4: Future Initiatives and Market Integration - The PBOC plans to enhance cross-border investment and financing convenience, focusing on four key initiatives to support the offshore RMB market and improve market openness [8][9]. - These initiatives include supporting foreign investors in bond repurchase transactions, expanding the "Swap Connect" trading limits, and increasing the availability of high-quality offshore RMB assets in Hong Kong [8][9].

Core Viewpoint - Hong Kong is positioning itself as a global center for fixed income and currency markets through the release of the "Roadmap for the Development of Fixed Income and Currency Markets," which outlines key measures to enhance market quality and international competitiveness [1][2]. Group 1: Key Measures of the Roadmap - The roadmap focuses on four pillars: promoting primary market issuance, enhancing secondary market liquidity, expanding offshore RMB business, and building next-generation market infrastructure [1][2]. - It includes ten specific initiatives aimed at boosting demand, liquidity, and innovation in the fixed income market [1][2]. Group 2: Market Performance and Growth - Over the past 15 years, Hong Kong's bond issuance has grown at an average annual rate of 16%, with international bond issuance exceeding $130 billion last year [2][3]. - Hong Kong has ranked first in Asia for nine out of the last ten years in international bond issuance, highlighting its leading position in the Asian fixed income market [2][3]. Group 3: Enhancing Market Liquidity - The Hong Kong Securities and Futures Commission is exploring the feasibility of an electronic bond trading platform to improve market efficiency, transparency, and resilience [3]. - Measures to enhance secondary market liquidity are expected to attract more international investors to the Hong Kong bond market [3]. Group 4: Financial Innovation and Technology - The roadmap emphasizes financial innovation, including the introduction of tokenized bonds and the integration of technology across various platforms and asset classes [4][5]. - The Hong Kong Monetary Authority and the Hong Kong Stock Exchange are exploring the establishment of a central asset management and asset tokenization platform to enhance global competitiveness [5]. Group 5: Offshore RMB Business - Hong Kong remains the largest offshore RMB center, handling over 70% of global RMB transactions, and is a key hub for dim sum bond issuance [5][6]. - As of the end of August, the issuance of dim sum bonds reached 475 billion RMB, with expectations to exceed last year's record of 700 billion RMB [6].

Core Viewpoint - The attractiveness of the Chinese bond market has significantly increased, with the People's Bank of China emphasizing its rapid development and international influence [1][3]. Group 1: Market Development and Growth - The Chinese bond market's net financing scale has risen from approximately 30% to over 40% of total social financing in the past five years [3]. - The bond issuance scale exceeded 59 trillion RMB in the first eight months of this year, marking a 14% year-on-year increase [3]. - As of August 2025, the total balance of the Chinese bond market reached 192 trillion RMB, ranking second globally [3]. Group 2: Investment Value and Returns - Chinese bonds have shown high nominal and real yields, ranking among the top globally [4]. - Over the past decade, holding a portfolio of Chinese bonds from the Bloomberg Barclays Global Aggregate Index yielded approximately 70% returns [4]. - The actual yield of RMB bonds remains relatively high, providing a good value preservation and appreciation avenue for global RMB holders [4]. Group 3: Risk and Liquidity - RMB bonds exhibit high diversification value, with low correlation to yields from G7 and other emerging market bonds [5]. - The trading activity of RMB bonds is robust, with an average turnover rate of nearly four times for government and policy financial bonds [5]. - The bid-ask spread for the most active interest rate bonds is around 0.02 basis points, comparable to developed markets [5]. Group 4: Foreign Investment and Market Access - Currently, foreign investors hold only 2% of the bond market, indicating significant potential for further opening [6]. - Nearly 1,170 foreign institutional investors have entered the Chinese bond market, with total holdings around 3.9 trillion RMB, a nearly fourfold increase since the Bond Connect was launched [8]. - In the first eight months of this year, the transaction volume of foreign institutional investors reached approximately 11.8 trillion RMB [8]. Group 5: Future Initiatives and Support - The People's Bank of China plans to support various foreign institutional investors in conducting bond repurchase transactions in the Chinese bond market [12]. - The daily trading net limit for the "Swap Connect" will be increased from 20 billion to 45 billion RMB to facilitate interest rate risk management [12]. - The central bank aims to accelerate the listing of RMB government bond futures in Hong Kong [13].

Core Insights - The People's Bank of China (PBOC) emphasizes the significant growth and international influence of China's bond market, highlighting its role in supporting the real economy and optimizing financing structures [1][2] - The PBOC plans to continue enhancing the integration of the Hong Kong and mainland bond markets, aiming for greater acceptance of mainland bonds as collateral in global markets [1][4] Group 1: Market Development - China's bond net financing scale has increased from approximately 30% of total social financing five years ago to over 40% currently [2] - The turnover rate of government bonds has risen from 2.4% to 3.8% over the same period, indicating increased trading activity [2] - As of August 2025, the total balance of China's bond market is projected to reach 192 trillion RMB, making it the second largest in the world [2] Group 2: Investment Opportunities - In the first eight months of this year, the issuance scale of Chinese bonds exceeded 59 trillion RMB, a year-on-year increase of 14% [2] - The net financing of bonds reached 11.8 trillion RMB, accounting for 44.5% of the increase in social financing during the same period [2] - The actual yield of RMB bonds remains relatively high, providing a valuable preservation and appreciation avenue for global RMB holders [3] Group 3: International Participation - Nearly 1,170 foreign institutional investors have entered the Chinese bond market, with total holdings around 3.9 trillion RMB, a nearly fourfold increase since the Bond Connect program was launched [5] - The trading volume of foreign institutional investors in the bond market reached approximately 11.8 trillion RMB in the first eight months of this year [5] - The proportion of foreign investors holding Chinese bonds is currently at 2%, indicating substantial potential for further opening [3] Group 4: Future Initiatives - The PBOC plans to support various foreign institutional investors in conducting bond repurchase transactions in the Chinese bond market [6] - The daily trading net limit for the "Swap Connect" will be increased from 20 billion RMB to 45 billion RMB to facilitate interest rate risk management [6] - The PBOC aims to accelerate the launch of RMB government bond futures in Hong Kong to enhance cross-border investment and financing convenience [6]

Core Insights - The People's Bank of China (PBOC) is implementing measures to enhance cross-border investment and financing, aiming to accelerate the development of the offshore RMB market [3][4] Group 1: Measures to Enhance Cross-Border Investment - PBOC will support foreign institutional investors in conducting bond repurchase transactions in the Chinese bond market to improve the efficiency of RMB bonds [3] - The daily trading net limit for the swap market will be increased from 20 billion to 45 billion RMB, facilitating investors in managing interest rate risks [3] - More high-credit-rated RMB assets, such as offshore RMB government bonds, will be provided in the Hong Kong market to enrich the RMB product system [3] - PBOC is working towards the launch of RMB government bond futures in Hong Kong [3] Group 2: Growth of China's Bond Market - As of August, the total balance of China's bond market reached 192 trillion RMB, ranking second globally [3] - In the first eight months of this year, the bond issuance scale exceeded 59 trillion RMB, a year-on-year increase of 14% [3] - Net financing through bonds accounted for 44.5% of the total social financing increment during the same period, making it the second-largest financing channel for the real economy [3] Group 3: International Influence and Investor Confidence - Nearly 1,170 foreign institutional investors from around 80 countries have entered the Chinese bond market, with total holdings reaching approximately 3.9 trillion RMB, a nearly fourfold increase since the Bond Connect was launched [4] - China's bonds now account for the second-largest share in the FTSE Russell Global Government Bond Index and the third-largest in the Bloomberg Barclays Global Aggregate Index, reflecting strong global investor confidence [4][6] Group 4: Market Maturity and Development Potential - The proportion of net bond financing in total social financing has increased from around 30% five years ago to over 40% [5] - The annual turnover rate of government bonds has risen from 2.4 to 3.8 over the same period, indicating increased market activity [5] - Currently, foreign investors hold only 2% of the total bond market, suggesting significant potential for further opening [6] Group 5: Enhancements in Bond Connect Mechanisms - The Bond Connect "Southbound" initiative has seen significant growth, with the number of bonds under custody reaching 971 and a balance of 574.21 billion RMB, reflecting a more than 26-fold and 102-fold increase, respectively, since its launch [7][8] - Recent optimizations to the "Southbound" mechanism include extending settlement times and expanding the range of participating institutions to include non-bank entities [8]

Core Viewpoint - The People's Bank of China is taking measures to deepen financial connectivity between the mainland and Hong Kong, reinforcing Hong Kong's position as an offshore RMB hub [1][2]. Group 1: Measures Announced - The People's Bank of China supports various measures including allowing foreign institutional investors to conduct repurchase transactions in the mainland bond market [1][2]. - The daily quota for northbound trading has been increased more than double to 45 billion RMB [1]. - There will be more RMB-denominated assets available in the Hong Kong market, including government bonds [1][2]. - The implementation of RMB government bond futures in Hong Kong is being expedited [1][2]. Group 2: Government Response - The Hong Kong government welcomes the measures and emphasizes its commitment to enhancing financial connectivity with the mainland [2]. - The Financial Secretary of Hong Kong highlighted the growing global demand for RMB-denominated products, reinforcing Hong Kong's role as a risk management center [2]. - The government expresses gratitude for the support from the central government and aims to contribute more to the nation's financial strength [2]. Group 3: Market Developments - The issuance of RMB bonds in Hong Kong is expected to exceed 1 trillion RMB in 2024 [3]. - The swap mechanism has been operating smoothly since its implementation in 2023, with average daily transactions reaching 20 billion RMB by August 2025, a fivefold increase from the first month of operation [3]. - There is an increasing demand for risk management tools as foreign investors participate more in the mainland bond market [3].

Core Viewpoint - The People's Bank of China announced measures to deepen the financial market connectivity between mainland China and Hong Kong, enhancing the role of Hong Kong as an offshore RMB business hub and risk management center [1][2][3] Group 1: Measures Announced - Support for foreign institutional investors to conduct repurchase transactions in the mainland bond market [1][2] - Expansion of the swap connect mechanism and optimization of management, including increasing the daily quota for northbound trading to 45 billion RMB [1][2] - Provision of more RMB-denominated assets, including government bonds, in the Hong Kong market [1][2] Group 2: Market Impact - The issuance of RMB bonds in Hong Kong is expected to exceed 1 trillion RMB in 2024, indicating a growing market [3] - The swap connect has been operating smoothly since its implementation in 2023, with average daily trading volume reaching 20 billion RMB by August 2025, a fivefold increase from its initial month [3] - The demand for risk management tools is increasing as foreign investors participate more in the mainland bond market [3]