Boosted by a slew of easing measures to support a slowing economy, some key onshore corporate-bond yields have been at their closest levels to comparable Chinese government debt in about 15 years. The spread for five-year AA rated yuan notes was 106 basis points Friday, the smallest since 2007 according to data compiled by Bloomberg. The premiums are about 0.5 basis point wider than their recent similar lows for benchmark three- and five-year AAA rated bonds.
But helping soothe domestic corporate debt has been the country’s divergent monetary policy from other nations, which has pushed yields lower onshore as authorities seek to support a slowing economy. Gross domestic product grew at a3.9% rate in the third quarter, according to delayed figures released Monday, though that’s below a 5.5% full-year target set early in 2022. Just-released September readings on unemployment and retail sales painted a weaker picture.
Risks could be mounting in the local credit market, and authorities have been releasing measures in efforts to avoid potential fresh debt troubles. For example, the Ministry of Finance recently tightened rules involving local governments’ land purchases amid efforts to deal with“The lack of high-yield assets available has increased market demand for high-yield LGFV bonds,” said Beijing BG Capital Management CEO Li Gen.
So, do you mention in your article anything about him being the first three term leader since Mao? You know, that chap that killed millions of his own people...