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19th Asia Bond Markets Summit - China Edition
China’s next act – retrofitting for tomorrow
27 June 2024 | - | Shenzhen
Overview

China’s economic recovery is on a shaky and uneven path. While the country posted a 5.2% GDP growth in 2023, which is in line with forecast, the reaction from investors and businesses has been rather muted.

No doubt the Covid-19 years have had an effect. The crackdown on the real estate sector and tightened tech regulation, arguably intended to redress the excesses that have emerged following turbo-charged expansion of the past many years, has slowed activity. Add to that is the ongoing trade tension with the US that has shifted supply chains and forced a rethink among the largest companies on the best way to manage geopolitical risks.

Indeed, confidence has been shaken. It is unlike the China that many have come to know of during the past decades of rapid growth. Instead, China is now facing the triple threat of deflation, de-risking, and deleveraging coming at the same time.

Global investors are standing aside from participating in the country’s capital markets. The stock and bond markets recorded outflows for most of the past two years. Predictions of a stronger turnaround have so far been proved wrong further dampening confidence. The elevated level of local government debt has not helped casting a dark cloud on what’s ahead.

Regulators have rolled out market-friendly reforms to facilitate investor access. For example, bonds traded via the Bond Connect scheme are now liquidity eligible, the Wealth Management Connect for the Greater Bay Area has been further enhanced, and the cross-border pilot programme for the digital yuan has also been expanded. Meanwhile, measures to revive the property sector have also been rolled out.

The monetary authority has cut interest rate to stimulate the economy. Local currency financing has become the preferred channel as many have switched out of the G3 bond market. China’s capital markets are vital to support the pressing needs of today and also its financing requirements in the coming years.

To be sure, amid the dark clouds there are silver linings. For example, China’s pivot to support the electric vehicle ecosystem has been an unqualified success. The country’s dominance in EVs has helped to catapult it to become the world’s largest car exporter in 2023. Commitment to renewable energy has passed a new milestone in 2023 as renewables such as wind, solar, hydro, and biomass energy surpassed thermal power for the first time and now accounts for half of the country’s installed power generation capacity.

The growing adoption of the Fourth Industrial Revolution technology from artificial intelligence to big data and 5G, is transforming commerce and industry. The prevalence of e-commerce, adoption of high-end manufacturing, rise of smart cities, and improved healthcare are critical to ensure the economy’s competitive advantage.

These complex challenges and emerging opportunities of what’s ahead make investing in China one of the most difficult balancing acts in the coming years. Sceptics are aplenty. But as the world’s second largest economy, China remains a market that is too big to ignore. With more measures underway in the coming months, will confidence return?

The Asset, is pleased to be hosting the 19th Asia Bond Markets Summit – China edition. Organized in association with the Asian Development Bank and Asian Infrastructure Investment Bank, the summit is the region’s longest-running fixed-income summit which brings together issuers, investors, policymakers and other stakeholders involved in Asia’s bond markets.

Agenda
27 June 2024
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09:00 AM
Registration and coffee
09:30 AM
Welcome remarks
09:40 AM
Keynote address
10:00 AM
Panel one: China’s next act – retrofitting for tomorrow

China is facing an uncertain economic future. Investors remain cautious as the country faces mounting deflationary pressure. Ongoing geopolitical tensions is exacerbated by the West’s de-risking strategy. China’s deleveraging campaign, across the real estate sector and local governments, continue to threaten the revival of its economy. On the other hand, China’s push into the green, clean, and a digital future is accelerating at a fast clip.

  • Can China mount a reconfiguration of the drivers of its economic growth and restore investors’ confidence?
  • What measures are being launched to deal with the ongoing deflationary pressure?
  • How are policymakers positioning the capital market for recovery?
  • Which funding avenues are proving to be popular for issuers amid the current landscape?
  • Will the pivot to a green, clean, and digital future create opportunities for both issuers and investors?
10:40 AM
Networking and coffee
11:20 AM
Panel two: What’s next for China’s bond market?

China’s bond market is slowly recovering from the record outflows that began at the end of 2021. As at March 2024, foreign holdings have recovered from the record low in August 2023 to reach nearly 4 trillion yuan. With its low correlation to bonds in the developed markets, 2023 was another year that saw Chinese bonds outperforming with a more than 4% return in local currency terms. In part, this is because China is on a different rate cycle versus the developed markets. Regulators continue to step in to improve market conditions and ensure stability. The panda bond market, in particular, is gaining ground, with landmark transactions including the first sovereign panda bond from Egypt. 

  • How are issuers viewing tapping the local currency bond market vis-a-vis going offshore?
  • Which sectors and theme will provide more opportunities?
  • What access channels are likely to be popular among foreign investors?
  • What are the new developments supporting China’s sustainable finance market?
11:50 AM
Panel three: The panda bond comeback

China’s panda bond market is gaining ground, with landmark transactions including the first sovereign panda bond from Egypt. Issuance is set to rise on the back of cheaper funding costs and refinancing needs of current borrowers. China’s regulators are also ramping up efforts to refine and improve policies to further support foreign companies in this space. 

  • What developments are driving the panda bond market?
  • How do borrowers view panda bonds vis-à-vis dim sum bonds?
  • How can liquidity issues in the secondary market be improved?
  • What must be done to further expand the investor base?
12:30 PM
Luncheon and networking
Previous event
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18th Asia Bond Markets Summit - Greater China Edition
20 Sep 2023
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