Global long-term sovereign yields have risen and bond selloff pressure has
intensified, while China’s bond market and the yuan have remained relatively
stable. As of Aug 21, 2026 cumulative panda bond issuance reached CNY 209.98
bln, up more than 73% YoY, amid increased onshore RMB funding by international
institutions. Market contacts note foreign investors account for only about 5–8%
of China’s bond market, leaving domestic investors with pricing dominance, and
say China’s monetary policy remains domestically focused so external shocks are
unlikely to reverse the domestic bond trend. Outlook: developed-market yields
are likely to stay volatile, bolstering the allocation case for RMB bonds and
potentially drawing sustained foreign inflows over the medium–long term;
offsetting risks include higher US Treasury yields raising global allocation
hurdles and possibly deterring foreign purchases of RMB bonds, and rapid rises
in developed-market yields constraining domestic risk-asset valuations.
