China’s bond market needs significant reforms, says IMF

China’s rapidly growing $15tn mainland bond market is one of the markets with top prospects for pension funds and other institutional investors. Still, trading risk, low liquidity, a thicket of legal trouble, and a shallow market are some of the significant issues the Chinese government debt market needs to address. There have been many regulatory restrictions in the Chinese bond market, allowing domestic, commercial banks to hold bonds to maturity. That lowers liquidity in the secondary market; thus, leading to high trading costs. The International Monetary Fund has advised that China’s bond market needs significant reforms to be a suitable