Fixed Income in China: The Primary Market

by Hua Zhang, July 6, 2010
Industry Trends


The Chinese bond market grew dramatically in 2009, due to the Chinese government’s economic stimulus package. However, there was a slight decline in central bank bills; the subordinated debt issued by commercial banks amounted to US$39.2 billion, a nearly three-fold increase over the same period of the previous year.

The Chinese bond market is multilayered and includes the interbank, stock exchange, and over-the-counter markets. In a new report, Fixed Income in China: The Primary Market, Celent examines the market size, structure, underwriters, and market trends of the Chinese fixed income market.

The bond issue forecast for 2010 is as follows: US$321 billion Treasury bonds, US$220 billion financial bonds, US$701 billion central bank bills, and US$80 billion corporate bonds. The banking industry has the largest share of the bond underwriting market in terms of absolute figures. Presently, joint venture securities brokers (CICC, China Galaxy Securities, and UBS Securities) are performing well; among the top five bond underwriters in 2009, three are joint venture securities brokers.

“Bond products in the Chinese market will become more diverse, and there will be more types of Treasury bonds as the country strengthens its benchmark position,” says Hua Zhang, analyst with Celent’s Asia Research Group and author of the report. “In the short term, more central bank bills will be issued to control inflation. Corporate bonds and debentures will also see rapid growth.”

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

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Table of Contents

Executive Summary


Market Structure



Market Classification



Interbank Market


Types of Bonds



Government Bonds



Central Bank Bills



Financial Bonds



Corporate Bonds



Convertible Bonds



Other Bonds






Leveraging Celent’s Expertise



Support for Financial Institutions



Support for Vendors


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