Yuan seen as major barrier
HONG KONG: China’s policymakers plan to open the doors wider than ever to foreign investment in the country’s US$3 trillion (RM13.02 trillion) bond market, in part to help shore up the struggling yuan. But the currency is also proving to be a major barrier to the success of their plan.
Foreigners own less than two per cent of China’s US$3.3 trillion in outstanding bonds and said getting their cash out of China and recent weakness of the closely controlled yuan were obstacles to investment.
Foreign investors are also sceptical they can assess risk accurately when most of the US$2.1 trillion in corporate bonds are rated investment grade by domestic rating agencies.
“If investors wanted to have more exposure to Chinese bonds, we can do it tomorrow,” said Stratton Street partner and chief investment officer Andy Seaman.
“But unfortunately, they don’t. It’s very difficult to persuade people because of the currency. They don’t want yuan,” he said. Reuters