Global Investors Dump Communist Chinese Bank Bonds

On July 11th, it’s reported that international investors were quickly unwinding bond transactions with financial institutions in Communist China.

For years, foreign investors purchased considerable amount bonds issued by Chinese Communist Party (CCP) policy-tilted banks, which include the China Development Bank, the Export-Import Bank of China, and the Agricultural Development Bank of China, funding for the domestic and overseas infrastructure such as dams, highways, and airports. These bonds were popular, and were considered to be low-risk like Communist China’s sovereign bonds and had higher interest rates. Since the Russia-Ukraine war, the Communist regime’s banks have loaned billions of dollars to Russia. The US, UK and ally countries have imposed sanctions against Russia, which accelerated the withdrawal of global capital. International investors have already sold $27 billion worth of bonds from those policy-tilted banks since February, and the sell-off has soared to $61 billion since May. And some private investment projects were increasingly divested.

Market watchers believe that the relationship between Russia and the CCP is not the main reason for the sell-off. The RMB continues to weaken and yields low, leading to the investors further losing confidence in the economy in mainland China.