China's Giant Liquidity Wave

Bloomberg: The Great Ball of China Money Rolls Into Bonds
Where the yield for five-year AAA-rated exchange-traded corporate bonds was about 70 basis points higher than the yield on Chinese government bonds as recently as July of this year, it compressed to as little as 10bps in September.

One Chinese company — a property developer known as China Vanke — managed that month to sell a 5 billion yuan ($785 million) bond at a yield of 3.5 percent. That was 4 basis points lower than the yield of China Development Bank bonds that effectively come with a government guarantee and a zero risk weighting, meaning investors are asking for less of a return to hold China Vanke debt.

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