Goldman Says China’s Domestic Bond Market a 1 Trillion Opportunity

As China’s stock market collapses, Goldman Sachs sees a new investment opportunity in that country: the domestic bond market.

“We expect more channels to be introduced, with significant potential to draw in foreign investment. Should foreign participation catch up to roughly the level of, say, Japan and Australia, the equivalent of around 10 to 20 percent of GDP, that could translate into more than $1 trillion of additional global fixed income investments to be allocated to China domestic bonds in the coming years,” analysts Kenneth Ho and MK Tang said in a Tuesday note.

They expect China’s bond market, the third largest in the world behind the U.S. and Japan, to more than triple in value from $6.3 trillion to $21.6 trillion in the next decade.


Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza