Chinese Debt Capital Markets: An Emerging Global Market...With Chinese Characteristics

35 Pages Posted: 24 Jul 2017

See all articles by Ronald W. Anderson

Ronald W. Anderson

London School of Economics & Political Science - Department of Finance; Centre for Economic Policy Research (CEPR); Sun Yat-sen University (SYSU) - Xinhua College

Date Written: July 19, 2017

Abstract

This paper surveys the current state of the Chinese debt capital markets. As judged by its size and sophistication of its infrastructure the Chinese bond market it is already a leading market globally. China is unusual in that non-financial corporate issues account for a large fraction of the market as compared to financial and sovereign issues. Despite the fact that a large part of the market is made up of information sensitive securities, domestic ratings and other forms of information disclosure are relatively underdeveloped. The structure of the corporate bond market is shaped by three alternative channels that regulate security issuance and by different regimes governing alternative issuer types. These features are by-products of China’s gradualist approach to enterprise reform which has allowed central and local state owned enterprises to slowly shrink in importance relative to the private economy. In addition, large scale infrastructure investments undertaken by local SOE’s account for a large proportion of non-financial bond issues. Comparing bond values by issuer type and issue type reveals strong signs of market segmentation which may reflect varying degrees of implicit state guarantees.

Keywords: Bonds, Chinese financial markets, International capital flows, State owned enterprise, Enterprise reform, Debt overhang

JEL Classification: F21, F34, G23, G24, G28, G34, G38

Suggested Citation

Anderson, Ronald W., Chinese Debt Capital Markets: An Emerging Global Market...With Chinese Characteristics (July 19, 2017). Available at SSRN: https://ssrn.com/abstract=3005392 or http://dx.doi.org/10.2139/ssrn.3005392

Ronald W. Anderson (Contact Author)

London School of Economics & Political Science - Department of Finance ( email )

Houghton Street
London WC2A 2AE
United Kingdom
+44 20 7955 6204 (Phone)
+44 20 7955 7420 (Fax)

HOME PAGE: http://personal.lse.ac.uk/ANDERSOR/

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Sun Yat-sen University (SYSU) - Xinhua College ( email )

China

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
281
Abstract Views
1,362
Rank
164,930
PlumX Metrics