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Asian Credit Monitor: China’s Onshore Bonds (Part II: Omaha Beach)

n Asian Credit Monitor: China’s Onshore Bonds (Part I: The Normandy), we highlighted the access and motivations for investing in China's onshore bonds. In Part II, we aim at a sequel that explains risks of investing in China's onshore bonds, hence the title of this report. At the end of the day, we believe there are a lot of naked swimmers among Chinese onshore bond issuers and, as Warren Buffett once said, "Only when the tides go out do you discover who has been swimming naked".

We need to stress that Bond Connect gives investors access, not a hedge, and the idiosyncratic risk of investing in China remains unchanged. That said, China's onshore bond investment is not for the faint of heart, especially if anyone intends to invest outside Chinese government bonds, Chinese policy bank bo...

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