U.S. turmoil boosts interest in Chinese corporate debt

Recent turmoil in the US markets is making Chinese corporate debt more attractive to investors. Less than six months ago, many credit managers viewed this debt as risky and uninvestable. Now, experts are noticing a shift in focus towards China. Winnie Cisar from CreditSights commented that the US's economic struggles have prompted global investors to seek safer options. Chinese corporate debt is experiencing a recovery, aided by a rise in stock market performance due to government fiscal and monetary support. Omotunde Lawal of Baring Investment Services mentioned that China's debt remains appealing as investors find it undervalued, especially with growth targets and advancements in technology. So far in 2025, Chinese companies have raised $15 billion in the dollar bond market, marking the highest amount for this period since 2022. Real estate companies are also gaining attention. Beijing Capital Group recently aimed to raise $500 million in debt, following a successful $450 million bond issuance. Interest in Chinese technology firms is also rising. Baidu, a major search engine, issued bonds worth 10 billion yuan, its first in two years, and quickly followed with a $2 billion bond that attracted significant investor interest. Despite these positive signs, there are still risks. Potential escalation in US-China trade tensions may impact China's economy. Analysts warn that certain Chinese debt issuers are still a concern, as they struggle to manage maturing debts effectively. While US corporate debt is much larger, rising uncertainty in the US may lead investors to explore opportunities in Chinese markets instead.