China has reminded investors that there’s more to the country than worrisome economic indicators by announcing a significant step in the opening up of its domestic interbank bond market. The move has positive implications for capital flows and the strength of the currency.
One of the challenges in forming a clear understanding of China’s economy from the perspective of investment risk and reward is the complex interplay taking place between cyclical trends and structural reform.
Slowing GDP growth, capital outflows, unsustainable credit growth, currency devaluations and volatile financial markets add up to an intimidating short-to-medium-term outlook.