Where developments in global bond markets are concerned, China has traditionally been a laggard rather than a leader. The country’s domestic bond market may now be the world’s third largest in terms of outstanding issuance, but at 1% of GDP, it still accounts for a very small proportion of its overall economy.
Its investor base is also not very diversified, with insurance companies, pension funds, and foreign portfolio investors all subservient to the banks, which dominate the interbank market in which most Chinese bonds are traded.
But China’s “war on pollution” is having a very positive effect on the development of green bonds as a global...
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