The latest auction of Chinese government bonds has set a global record.
China raised a total of $8.6 billion U.S. by tapping both the American dollar and Euro bond markets in the past two weeks.
Bids for the two Chinese bonds reached a record $234 billion U.S. as central banks, sovereign wealth funds, and insurers around the world clamoured for the Asian nation’s international debt.
The enthusiasm for Chinese bonds is a reversal from a few years ago, when China was viewed as “uninvestable” because of its slumping economy and state control of private enterprise.
But now the mood has changed and China’s global debt offerings are drawing strong interest.
Bond traders and analysts say China is attracting attention amid growing concerns over the fiscal and political situation in the U.S.
China’s Ministry of Finance sold €4 billion ($4.6 billion U.S.) of Euro-denominated bonds on Nov. 18, drawing orders of 25 times the issuance size, the most ever for such offerings by the nation.
European investors bought 51% of China’s Euro debt, with 35% acquired by entities in Asia, according to a statement from the Chinese finance ministry.
China also held a successful $4 billion U.S. dollar bond sale on Nov. 5, where demand was 30 times greater than expected.
The healthy demand enabled China to price its shorter duration bond offering in line with U.S. Treasuries even though the U.S. has a much larger role in the global financial system.
China’s strong bond sales are boosting the appeal of the nation’s assets, which have shown resilience in recent months amid volatility in the stock market and U.S. debt market.
