Market Summary

Yield Movements

Local currency (LCY) government bond yields in the People's Republic of China (PRC) fell for most tenors between 1 December 2024 and 28 February 2025 on expected further monetary easing by the central bank. Bond yields fell an average of 19 basis points (bps) for tenors of 5 years or longer, while tenors of 4 years or less saw their yields rise an average of 12 bps.

Local Currency Bond Market Size and Issuance

The PRC's LCY bonds outstanding grew at a slightly faster pace in the fourth quarter (Q4) of 2024 to reach CNY155.1 trillion at the end of December over lower maturities. Growth accelerated to 3.6% quarter-on-quarter (q-o-q) in Q4 2024 from 3.1% q-o-q in the previous quarter, led by faster q-o-q growth rates for both government bonds and corporate bonds.  Meanwhile, LCY bond sales in the PRC declined 10.3% q-o-q to CNY12.1 trillion in Q4 2024 from CNY13.9 trillion in the previous quarter.

Sustainable Bond Market

The PRC's sustainable bond market is dominated by green bond instruments and private sector financing. The PRC has the largest general bond market in emerging East Asia and also the largest sustainable bond market, which reached a size of USD368.1 billion and comprised 53.2% of emerging East Asian sustainable bond total at the end of December. A majority of the PRC's sustainable bonds are green bonds, with a share of 87.8% while private corporations dominate, accounting for 93.9% of outstanding bonds.