Global Bond Market Sell-off, Panda Bond Issuance Reaches Historic High

The long-term government bond yields of major global economies continue to rise, increasing the pressure of sell-offs in the bond market. China's bond market and exchange rate remain stable, with the issuance of Panda bonds reaching a historic high for the same period. As of August 21, the cumulative issuance of 2026 Panda bonds has reached 209.975 billion yuan, an increase of over 73% year-on-year. Against the backdrop of global bond market fluctuations, the increased financing in renminbi by international institutions has drawn attention. Industry insiders indicate that China's economic and monetary cycles are completely different from those overseas, with foreign capital accounting for only 5%-8% of China's bond market, while domestic capital holds absolute pricing power, meaning the overall trend of the domestic bond market is not affected by overseas shocks. Looking ahead, industry insiders believe that overseas bond yields are likely to maintain high volatility, highlighting the value of renminbi bond allocations, which may attract continuous foreign investment in the medium to long term. However, it is important to note that rising U.S. bond yields may raise the return threshold for global allocation funds, affecting the willingness of foreign institutions to increase their holdings of renminbi bonds. Additionally, the rapid rise in bond yields in developed countries overseas may also constrain the valuation of domestic risk assets.