China Bonds Match US Treasuries as USD Demand Soars
China’s return to the dollar bond market drew a staggering $118 billion in orders for its $4 billion USD-denominated bond offering, nearly 30 times oversubscribed. The notes were priced either in line with US Treasuries or at a minimal two-basis-point premium, reflecting robust investor confidence in China’s creditworthiness amid cooling US-China trade tensions.
Beijing’s bond sale serves dual purposes: funding general government needs and strengthening the pricing benchmark for Chinese issuers in international markets. With $90 billion in total Chinese USD bond sales so far in 2025, issuance is approaching a three-year high, signaling renewed appetite for Chinese credit after pandemic-era property distress and high US rates.