Foreign Buying of Chinese Bonds Surges, But Sustainability Questioned
• Foreign purchases of Chinese bonds surged in November, sparking optimism that pessimism about China's assets is overblown
• Inflows likely resulted more from a global bond rally as traders bet on Fed pivoting than China-specific reasons
• Constraints on PBOC easing and China's economic/financial risks may limit foreign appetite for bonds
• Chinese bonds offer relatively low yields compared to other emerging markets
• Some see opportunities for more inflows from arbitrage and if China cuts rates further, but others are cautious