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In the last few years, internationalization of the RMB and the development of the Offshore China bond market has progressed well amidst a shift in the global economic and political landscape.

The global financial crisis was started by the US subprime meltdown and followed by the European sovereign debt crisis. This resulted in a progressive transfer of economic and political power from the west to the east, from developed markets to emerging markets. Concerns over macroeconomic stabilities and growth of developed markets have resulted in investors increasingly looking to reduce investment exposure in developed markets in favor of emerging markets.

An environment of low interest rates and low growth in global equities has made fixed income assets the asset of choice for investors, especially in emerging market bonds and global high yield bonds. Data from EPFR Global shows that the net inflow into emerging market bond funds was USD 56.4 billion for 2012, more than 3 times the amount from 2011. The net inflow into global high yield bond funds was even higher at USD 70 billion over the same period.

Among the emerging markets, investors are paying increasing attention to the China fixed income market. China has already become the second largest economy in the world, but because of restrictions on foreign investment in the past, China bonds have generally constituted only a small portion (if any) of US investors’ portfolios. The rapid development of the offshore China bond market and its advantages compared to other bond markets in the world, will change this and make China offshore bonds an integral part of investors’ portfolios.

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Although the information provided by third party was compiled from sources believed to be reliable, no liability for any error or omissions is acceptable by HFM, HGI, their approved distributors, or their affiliates or any of their directors or employees. The information and opinions contained herein is for general reference only and may change without notice, and should not be relied upon for any investment decision. You are advised to consult your financial adviser before making any investment decision.