The Investor's Guide to China: Debt
A lot of the financial headlines we’re seeing about China lately involve debt of one form or another. It could be a real estate company that borrowed too much and got into trouble or a new macro policy aiming to rein in leverage in the banking system. But it’s important to differentiate between bad debt and good debt. While companies going bust may be newsworthy, this can also help in reducing so called ‘moral hazard’ if it results in credit risk being priced better by investors. While another positive force is China’s onshore bond market which has nearly doubled in the last five years, and is now the second biggest bond market in the world.
To help explore China's debt markets, Catherine Yeung, Investment Director, and Marty Dropkin, Head of Asian Fixed Income & Hong Kong Investments, are joined by George Efstathopoulos, Multi-Asset Portfolio Manager, and Monica Li, Equities Director. With additional contributions from Olivia He, Portfolio Manager, and Claire Xiao, Credit Analyst.
This document is issued by FIL Responsible Entity (Australia) Limited ABN 33 148 059 009, AFSL No. 409340 (“Fidelity Australia”). Fidelity Australia is a member of the FIL Limited group of companies commonly known as Fidelity International.
This document is intended for use by advisers and wholesale investors. Retail investors should not rely on any information in this document without first seeking advice from their financial adviser. This document has been prepared without taking into account your objectives, financial situation or needs. You should consider these matters before acting on the information. You should also consider the relevant Product Disclosure Statements (“PDS”) for any Fidelity Australia product mentioned in this document before making any decision about whether to acquire the product. The PDS can be obtained by contacting Fidelity Australia on 1800 119 270 or by downloading it from our website at www.fidelity.com.au. The Target Market Determination (TMD) for Fidelity Australian product(s) can be found at www.Fidelity.com.au. This document may include general commentary on market activity, sector trends or other broad-based economic or political conditions that should not be taken as investment advice. Information stated herein about specific securities is subject to change. Any reference to specific securities should not be taken as a recommendation to buy, sell or hold these securities. While the information contained in this document has been prepared with reasonable care, no responsibility or liability is accepted for any errors or omissions or misstatements however caused. This document is intended as general information only. The document may not be reproduced or transmitted without prior written permission of Fidelity Australia. The issuer of Fidelity’s managed investment schemes is FIL Responsible Entity (Australia) Limited ABN 33 148 059 009. Reference to ($) are in Australian dollars unless stated otherwise.
© 2022 FIL Responsible Entity (Australia) Limited. Fidelity, Fidelity International and the Fidelity International logo and F symbol are trademarks of FIL Limited.