Introduction to China’s onshore credit bond market

China’s onshore bond market is second only to the US bond market in terms of its size. China’s market represents a diversified universe of issuers and exceeds USD17 trillion in total amount outstanding. The recent inclusion of Chinese onshore bonds in global bond indices has helped raise international awareness of this important market. International investors may be most familiar with China’s so-called onshore “rates” market, which consists of Chinese government bonds, policy bank bonds, local government bonds and central bank bills. In this paper, we seek to familiarize investors with China’s onshore “credit” bond market, which includes interbank deposits, corporate bonds, enterprise bonds, financial bonds, medium-term notes (MTN), asset-backed securities (ABS), private placement notes (PPN), short-term commercial paper (SCP), government-supported institution bonds, convertible bonds, exchangeable bonds, panda bonds, and standardized commercial instruments. The credit bond market accounts for 44% of China’s total onshore bond market.