Source: Bloomberg
Whether Chinese bonds have traded or destroyed. Three Japanese market veterans pondered beer while drinking beer: specifically and slightly reflecting the dilemma faced by global investors when deciding to participate in the world's second largest bond market.
Akira Takei, Tatsuya Higuchi and Hideo Shimomura are three fund management companies in Tokyo, with total assets of US $ 640 billion.Although they have at least ten years of friendship and have common hobbies, including talking about financial affairs while drinking, their views on Chinese bonds are different.
Higuchi as Mitsubishi UFJ KOKUSAI Asset Management Co., a financial veteran with 30 years of experience; he believes that China is the first choice for bond investors, and after all, almost all places are rising.
Takei for 37 years of investment in sovereign bonds. Now he works in Asset Management One Co.. He does not touch Chinese bonds.His argument is that the risk of holding these securities is too great.The Shimomura of Fivestar Asset Management Co. has also felt the same. He has been investing in various markets in the past 30 years.
Takei said that he has never invested in Chinese bonds during his entire career. He mentioned reasons for China's real estate dilemma, capital control, and intensified situations with Western geopolitical tensions.He said that if you invest in Chinese government bonds, you may not get back the money.
Higuchi has less doubts.Higuchi said in the office in Youlecho that China's economic slowdown is much faster than in other countries in the world, so investment in government bonds is returned.He said that he could not find a market with a steeper yield of more than 2%and a higher yield curve.
Their respective ideas highlight one of the biggest dilemma in the global financial sector: how to invest in a market that is so large that it cannot be ignored, but this market is easily affected by the unpredictable decision -making and the world's two major economies.Decisions have also made some of China's largest corporate giants.
The Chinese government has tried to prevent the "disorderly expansion of capital", and has also opened up the country's trillions of dollars in markets in the world. As a result, communism and capitalist marriage has been a unstable combination for 40 years.From artificial intelligence to military technology to Taiwan's destiny, the deterioration of tensions between China and the United States will only exacerbate this contradiction.
Japan, as the last fortress of the ultra -low interest rate, has released $ 4.2 trillion in cash in the investment world, and is eager to buy or provide higher -income assets.The question is how much risks they are willing to get these returns.
Chinese investors have suffered losses before, and even in bonds.Calculated in the US dollar, Bloomberg, an index about Chinese government bonds fell 5%last year, and fell about 5%in 2016.The market is still discussing the sharp depreciation of the RMB in 2015, especially when the RMB is under pressure.
Although the performance of Chinese bonds in recent years is superior to similar global bonds, this has not prevented foreign investors from exiting the market -the scale of capital outflow last year set a record of 616 billion yuan.Foreign capital has recently tried to return to the Chinese bond market.
