Key facts
- A record gap exists between US and Chinese bond yields.
- Marsh Investment believes this yield gap will not lead to significant capital flight from China.
- Capital controls and limited investment opportunities in China are cited as reasons for this stability.
Marsh Investment has indicated that the widening gap between US and Chinese bond yields, which has reached record levels, is unlikely to prompt a significant outflow of capital from China. The firm attributes this to existing capital controls and the limited range of investment options available to Chinese investors. Despite the substantial difference in yields, these structural factors are expected to prevent a large-scale departure of funds.