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China’s Higher Bond Yields Buck the Global Trend (Advisor Perspectives, 4 min read) Chinese bond yields are rising while global bonds are falling due to three factors, according to Alliance Bernstein. First, a stabilising economy has caused a rotation from bonds into equities. Second, forward-looking investors reduced their exposure to the increasing supply of government bonds during COVID. Third, PBoC has signalled a neutral policy. Going forward, they see China’s bond yields declining and RMB stable/appreciating. [Bullish Chinese Fixed Income]
The US May Lose in Trump’s TikTok War (Project Syndicate, 5 min read) Shang-Jin Wei, a former chief economist at ADB, outlines that US investment in China is about twice as large as the Chinese investment in the US. 30% of US MNCs’ global profit stems from China. Any retaliation from China has the potential to hurt the US more. After this ban, US administrations may have also lost support with regards to improving human rights, intellectual property rights and information flow from China.[Bearish US MNC’s]