Pursuits
Wanted: World Class China Bond Market to Match SDR Currency
- Analysts expect major growth in China's government bond market
- But widespread reforms still needed to lure foreign investors
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What if you had a reserve currency but nobody wanted -- or even could -- hold much of it?
That’s somewhat the situation for China as it prepares to join the reserve currency club next year. Compared with U.S. Treasuries, the typical asset held as reserves in dollars, buyers face a thicket of rules and a limited array of counter parties. For one thing, besides central banks and sovereign funds, not many other foreign investors can currently buy Chinese government bonds.