Chinese government bonds are emerging as a viable reserve asset, having remained
resilient through geopolitical shocks like the Iran conflict, according to
Gavekal Research. Analysts note China’s long-term bonds outperformed US
Treasuries after Covid-19 and stayed stable post-Ukraine war, benefiting from
low-cost electricity and industrial strength. The report suggests China’s
sovereign debt, supported by its economic and trading dominance, could attract
reserve flows in an inflationary world, shifting interest from gold and US
Treasuries to renminbi- and Asian-currency-denominated assets with yields.
