A Little About China’s Market Rates
Not Likely to Increase in a While
Looking at the history of China, China is the world's topmost economic powers since many decades. Until the 1700 China was accounted for about ¼ of the total global Gross Domestic Product and ⅓ of GDP in 1820 globally. After Japan, China is the 2nd biggest creditor nation around the globe.
Let's get to the point, why we were here. Everybody knows that it takes a lot of time to succeed in something, but here you can see something fishy, as it is about China. As read earlier, the headline has crossed a commentary piece in China’s state-run China Securities Journal. Let's not waste much of the time and get into it.
Further adding to this, as per the reports:
The state-run China’s Securities journal said, despite the recent sharp uptick in US bond yields, China’s market interest is unbelievable to increase immediately in such a small amount of time. The Chinese bonds have been less sensitive, according to their US counterpart. China and the United States - the topmost of the globe have the biggest economies, and they have diverged their economic cycles.
Further to this, there was a comment added in the state’s media that said that macroeconomic policy changes and the domestic rates have also priced to them in the effect of macroeconomic policy changes. The state-run media also added that the further increase in China’s market rates contains 2 policy rates. And they are “Interest rates in the open market operations and the Medium-term lending facility (MLF)”. These policies, with no signs of being pushed up in the short term, were kept stable. The newspaper said that the small conditions at both homes and abroad are improving, and the traders at multigroup are paying attention to the price trends. Keeping in common the assumption for the hike and the broad economy, they have maintained the supply and demand in the bond market during the beginning of 2021.
Further on, the government bond may speed up in the 2nd quarter of the year by causing increasing supply pressure, not ending the upward trend of market interest rates currently. The yield on the standard United States 10 years Treasury bond has hiked up to about 60 basis points till today’s date, comparing with an addition of 10 basis points for the 10 years in a similar time, which leads to becoming smaller in amount for the yielding premium.
At the beginning of this month, the higher authorities of the Chinese Bank and the Insurance Regulatory Commission, Guo Shuqing says, that their nation was researching the methods for handling the capital inflows for the prevention of turbulence in the market since they are anxious about the problems of the bubble bursting in the international market.
As the sources, Reuters report in the China State-run media, the information is provided. I hope you will find it helpful to know about China’s rising market in the short term.