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After several failures, china government bonds issued success

Posted on Jul-23-2009· by

Yesterday, China’s 15th government bond finally started trade.  The bond is fixed-rate bonds with a period of 3 years and 2.22% nominal interest rate. Before it, there are three consecutive times failure of the issuance of treasury bonds.

MR market.china is worry about the inflation, he is also doubted with the policy concerns of the central bank of china, this cause the yield of the short-term government bonds rapid rise,just look the picture of the right ,it is the INDEX OF CHINA BOND.  Also, this caused three consecutive failed bonds issue. And, China’s Ministry of Finance was forced to postpone the four local debt issuance.

I think we should pay attention to the signal of the failure of the bond issue, which indicates that the MR market’s expected is reversing, and there are some problem in the loan structure of these banks. Now the amount of the loan is create and creating the record of  china , we must pay attention to the efficiency of these loan , is it to the factory and family? Or it just been used to invest house? just like chinese idiom said: overkill.

At the same time,China’s investment in government bond  of the United States broke the 800 billion U.S. dollars  now, continue to be the largest investor in the bond market of USA. At the same time, the “bond king”  Bill Gross is still sale out their own bond of USA, Gross managed the size of 161 billion U.S. dollars of funds,the holders of government bonds from 28% (March) , reduced to 24% (June) , Holders of mortgage debt assets  from 61% (May) to 54% (June) , it is the lowest level over the past two years. At the same time, Japan, Russia and many other countries are selling their U.S. Treasury bonds. At the same time, we are still buy and buy, more and more.

Gross warned investors care of the risk with dollar-denominated assets earlier in a television interview, now every American currently has 40,000 U.S debt, Chinese investors are very worried that our depreciation of the investment in USA. And many chinese people is worry about Clinton’s action, she is still tell the world and China’s neighboring areas , china is a threat , some observers of china said, business just is business, if we just use business profit to face the pressure of Clinton, if we just help USA but ignore the voice of ” china threat” theory. we will failed.

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