Lauren Caldwell
Financial Sector Developments & Reform in Emerging Markets
November 5, 2013
Capital Markets in China
The Chinese capital markets were established in their modern form in the 1980s, following the
reform and opening period, in order to provide alternative sources of funding for state-owned
enterprises and national construction projects. While the markets are comparatively small as a
percentage of national gross domestic product, particularly with comparison to China’s banking sector,
they rank among the largest in the world in absolute terms. However, the influence of the Chinese
government – as majority shareholder and owner of the stock market’s largest corporations – may reduce
the efficiency of capital markets, since government ownership is associated with an implicit bailout
guarantee. Additionally, government regulations have historically discouraged the issuance of corporate
bonds, which result in a reliance (and a concentration of risk) on commercial banks for funding.
In this paper, I will assess the development of the capital markets. First, I evaluate the stock
markets, noting the size of the market, concentration, liquidity, volatility, institutions and regulation, and
international integration. Next, I evaluate the bond markets, noting the size of the market, categories of
bonds, bondholders, and opportunities for foreign investors. Finally, I recommend several measures that
will improve the stability of China’s capital markets, and contribute to the ability of the private sector to
grow and compete internationally.
Assessing the Development of the Chinese Stock Markets
History
The Chinese stock markets were established in response to the widespread losses and inefficiencies of
state-owned enterprises (SOEs), which dominated nearly all of China’s economy in the latter half of the
twentieth century. State-owned banks served as the primary sources of capital for SOEs, and bank loans
1
were provided with an implicit debt forgiveness guarantee, which offered little incentive for SOEs to
succeed financially. While earlier figures are difficult to verify, scholars have found that by 1994, more
than half of the 110,000 SOEs in China were operating at a loss.1
In the mid-1980s, following the economic liberalization of the 1978 reform and opening period,
the State Council invited experts from the United States to discuss the potential for a Chinese stock
market as an alternative source of funding for SOEs. However, the discussion stalled in the late 1980s, as
political protests (including Tiananmen Square in 1989) and the rise of private enterprises seemed to
threaten the stability of SOEs. Consequently, the Chinese government desired a stock market that would
protect the SOEs – an objective that resulted in several unique stock market characteristics, which will be
outlined in greater detail later in this section.2
In 1990 and 1991, the State Council established the Shanghai Stock Exchange (SHSE) and
Shenzhen Stock Exchange (SZSE). The central government asserted strong influence over the stock
market from the beginning: First, to avoid the loss of state-owned assets, the government acquired a
majority of the shares. As an additional measure for maintaining stability, the government mandated
that these stocks were non-tradable, and could not be purchased by private individuals and
corporations.3
Of course, majority state ownership of shares produced similar moral hazards to the previous
arrangement, in which state-owned banks provided loans to SOEs with implicit bailout guarantees.
Therefore, in the late 1990s and early 2000s, the State Council introduced several campaigns to reduce
state shareholding. Yet each of these campaigns met with failure: Shortly after the 2001 campaign to
increase the supply of stocks and decrease state shareholding, for example, the index of the Shanghai
Stock Exchange decreased 35 percent. The State Council ended the campaign, and the government
continues to own a majority of SOE shares.4
2
Stock Market Development Indicators
A stock market, also known as an equity market, connects buyers and sellers through the exchange of
stocks (or “shares”). Stocks represent a share in the ownership of a company, which is associated with
two benefits: voting influence over the management of a company, as well as a share of company profits
in the form of dividends. The price of a share is determined by the perceived value of the company –
indicated by demand and how much buyers are willing to pay – and stock prices tend to rise or fall in
response to the company’s performance. Buyers may be individual investors, as well as institutional
investors, such as banks, mutual funds and hedge funds.5
Why does stock market development matter? A well-developed stock market provides greater
choice for investors, and an efficient means of raising capital for companies. While there is not necessarily
a causal relationship between stock markets and gross domestic product, well-developed stock markets
have historically been associated with greater economic growth.
Stock market development can be assessed according to several variables: the size of the market,
concentration, liquidity, volatility, institutions/regulation, and international integration. Generally,
developed stock markets are associated with less concentration, more liquidity, less volatility, and
greater size.6 In the following sections, I will assess the status of each variable, as well as the extent of
government influence in the Chinese stock markets.
Size and Concentration
In 2012, Chinese stock markets accounted for about 44 percent of domestic gross domestic product,
similar to the size of the bond market (41 percent). In comparison, banks dominate the Chinese economy,
and provide credit to the private sector that equals about 128 percent of GDP.7 (See figure below.)
3
Source: Brookings Institution John L. Thornton China Center
What accounts for the domination of the bank sector? In most developed economies, like the
United States, the stock and bond markets contribute significantly more capital to the private sector.
However, banks are uniquely well-qualified to succeed in emerging markets, and China is no exception.
First, banks thrive in an environment of weaker institutions and technology, as they have an advantage
in building relationships and gathering information about their clients. Second, the largest banks in
China are majority state-owned, and they have an implicit government bailout guarantee, which make
bank loans a comparatively less risky source of capital.8
As of November 2013, there were 953 companies and 2,593 securities listed on the Shanghai Stock
Exchange, accounting for 15.05 trillion RMB (29 percent of GDP).9 There are 1,536 companies and 2,306
securities listed on the Shenzhen Stock Exchange, accounting for about 8.40 trillion RMB (16 percent of
GDP). 10 In total, there are about 2,500 companies listed on China’s stock exchanges with a market
capitalization of about 23 trillion RMB (or USD$3.7 trillion).
In comparison, there are more than 4,500 companies listed on the New York11 and NASDAQ
Stock Exchanges, with a combined market capitalization of about USD$21 trillion. By the end of 2012, the
Shanghai Stock Exchange was the seventh-largest stock exchange in the world by market capitalization.12
Yet among Asian and emerging markets, only the Tokyo Stock Exchange Group and the Hong Kong
4
Exchanges are greater – and if you combine the Shanghai and Shenzhen Stock Exchanges, China has the
second-largest stock market in the world, second only to the United States. (See figure below.)
Source: World Federation of Exchanges
When evaluating the development of capital markets, it is often useful to consider concentration
– that is, whether the value of the stocks in the market are concentrated among a small or a large number
of companies. Less concentration may indicate greater competition. However, in the case of China,
concentration is a less useful variable. As of September 2013, the largest ten firms in the Shanghai Stock
Exchange are: the China Oil and Gas Group, the Industrial and Commercial Bank of China, the
Agricultural Bank of China, the Bank of China, the China Petroleum and Chemical Corporation, the
China Life Insurance Company, the China Shenhua Energy Company, the China Merchants Bank, the
People’s Bank of China, and the Industrial Bank Company. It is less significant that the top ten companies
account for 33.62 percent of the market. Rather, one of the most unique characteristics of the Chinese
stock market is that these ten companies are majority state-owned. Indeed, China is the only stock market
in the world in which a majority of the listed companies are state-owned enterprises.13
5
Liquidity and Volatility
In the case of the stock market, the term “liquidity” describes how quickly shares are bought and sold. It
can be measured by a “turnover ratio,” the total value of shares traded during a period of time divided
by the average market capitalization. In 2012, the average annual turnover rate in China was 164.4
percent – a relatively high, but seemingly unremarkable figure, given that the annual turnover rate in
the United States has varied between 189 and 124 percent in the past three years.14 A greater degree of
liquidity is considered characteristic of developed capital markets.
However, this figure fails to account for the large number of Chinese shares that are governmentowned and non-tradable. When only tradable shares are considered, the average turnover rate over the
past five years is 341 percent, reaching a recent high of 666 percent. This extreme degree of liquidity is
more likely to create bubbles and sudden stock market crashes.15
This highly speculative behavior has inspired many observers to compare the Chinese stock
markets to a casino. While the Chinese are known for a national love of gambling, the volatility in the
Chinese stock market is rooted in regulation, rather than culture. Chinese shareholders have weak
shareholder rights – specifically, they cannot ensure they will receive dividends – and the government
often owns the majority of shares, which eliminates the influence of individual voting rights. Therefore,
rather than invest in stocks with the hope of long-term company success, Chinese investors prefer to seek
profits based upon short-term volatility in prices.16 Furthermore, the Chinese stock market has a large
proportion of individual investors, rather than institutional investors, since many large institutions are
not permitted to invest in the stock market. (This ratio is in stark contrast to the United States, where
individual investors make up a small minority of activity.) Research suggests that institutional investors
have a turnover rate that is 40 percent lower than individual investors, which could partly account for
the high turnover ratio in China.17
6
Institutions and Regulation
The Chinese government is the most important actor in the Chinese stock markets, since the stock
exchanges, a majority of the shares, and most of the largest companies are state-owned. The government
also regulates the stock markets through laws that restrict who can invest and how shares can be traded.
Scholar Ding Cheng argues that this government influence, rather than institutional development in the
form of legal protections for investors or supervision, is primarily responsible for the rapid development
of the Chinese stock markets.18
The China Securities Regulatory Commission is the foremost institution responsible for
regulating the Chinese securities markets. In its earliest years, the CSRC controlled entry into the stock
market with a quota system. Today, the CSRC permits entry according to an approval system. However,
most bankers agree that regulators use an informal quota system for different regions and industries,
and state-owned enterprises (or those with government connections) are more likely to receive approval
for their initial public offering.19
Chinese stock market regulation is said to have a “dualist structure,” since there are different
laws governing tradable and non-tradable shares. Non-tradable shares make up two-thirds of the market,
and they are divided into two categories: “state shares” and “legal person shares.” “State shares” are
held by government agencies or authorized institutions on behalf of the state, and they include shares of
state-owned enterprises. These shares cannot be traded, although they can be transferred with the
approval of the CSRC. In comparison, “legal person shares” are shares of a company in which the state
is the majority (but not full) owner. Like state shares, these shares cannot be traded without permission
from the CSRC.20
The two most common forms of tradable shares are “A-shares” and “B-shares.” “A-shares” can
only be owned by Chinese residents and domestic institutions. However, they can be freely traded in the
7
stock market. “B-shares” were originally offered only to international investors, although Chinese
citizens have since gained permission to own and trade these shares, as well. “B-shares” must be
purchased with foreign currency. As of 2012, there were 945 “A-shares” and 54 “B-shares” on the
Shanghai Stock Exchange.
Finally, there are several shares issued by Chinese companies that are listed only on foreign
securities markets. These companies are subject to CSRC regulation, but are otherwise outside the
Chinese securities market. These include “H-shares” (Hong Kong Stock Exchange), “N-shares”
(American stock exchanges), “L-shares” (London Stock Exchange), and “S-shares” (Singapore Stock
Exchange).21
What are the advantages and disadvantages of the Chinese government’s regulation of its stock
markets? According to scholar Ding Cheng, “[The] presence of state ownership, with its implicit
guarantee of companies and investment banks alike, is the key to the development of China’s capital
market. It allows the listed companies and other major players to expand rapidly without needing a
reputation that takes years to build.”22 Government ownership reduces many of the risks associated with
owning stocks, and encourages individual investors to enter the market.
However, this system also has many flaws, Cheng notes. For example, since the Chinese stock
markets were developed to provide alternative sources of funding for state-owned enterprises, the
regulations governing the stock markets do not prioritize legal protections for investors. This lack of
investor protection laws has resulted in highly speculative trading.
Furthermore, there is poor supervision of the capital markets: The CSRC lacks autonomy and
judicial power to investigate illegal activity, and the state control of both shareholding and supervision
leads to widespread corruption. Guo Shuqing, Chairman of the CSRC, noted, “Insider trading, market
manipulation, fraudulent listings and other illegal activities have not only seriously distorted the normal
8
path for investors seeking returns but have also severely harmed investor confidence and critically
affected normal market functions.” Supervision is an especially difficult task because, according to a
recent investigative report, many Chinese officials say they do not believe insider trading is wrong.23
International Integration
While foreign firms are not yet permitted to sell shares in the Chinese stock markets, many large
privately-owned Chinese firms have chosen to list on foreign stock exchanges, in response to the informal
quotas that limit initial public offerings in China. However, this trend has reversed in recent years,
following reports of illegal activity among foreign-listed Chinese firms.
Since 2010, Muddy Waters, an investment research company, has published more than twenty
reports exposing accounting fraud at Chinese firms listed in the New York Stock Exchange and NASDAQ.
Several firms saw a 70 percent drop in stock price following the publication of the reports. Most recently,
Muddy Waters accused the Chinese Internet company NQ Mobile of accounting fraud. Now, many of
these Chinese firms have attempted to re-list on the Hong Kong or Shanghai Stock Exchanges. 24
However, foreign firms might soon be permitted to sell shares in China, according to a Wall Street
Journal report. Chinese authorities are preparing a proposal that would permit select foreign companies
to raise capital in the newly-established Shanghai Free-Trade Zone, perhaps a precursor to permitting
foreign companies to issue initial public offerings in the Shanghai Stock Exchange. The free-trade zone
was introduced in late September to assist in developing China’s financial services sector; financial stocks
will soon be the largest sector in the United States stock exchanges, but they are dwarfed by the industrial
sector in China.25
Assessing the Development of the Chinese Bond Markets
Bond Market Development Indicators
What is the bond market and how does it differ from the stock market? The bond market connects longterm borrowers with investors that seek long-term securities. Bonds (also known as “fixed-income
9
securities”) represent debt, while stocks are equity. For example, a stockholder purchases voting rights
in a company, and the right to dividends from the company’s profits. In comparison, a bondholder
provides an issuer with capital, and in return, the issuer returns the amount borrowed at a specified date
with interest. The bondholder will earn no more or less than this amount, regardless of the issuer’s
performance. The stockholder, on the other hand, will lose money if a company performs poorly or
becomes bankrupt. Therefore, there is often less risk associated with owning bonds.26
According to David Beim and Charles Calomiris, a successful bond market requires a credible,
stable government; solid fiscal and monetary policies; a reliable legal and regulatory infrastructure; a
liberalized financial system; and money markets that ensure liquidity. Additionally, a government must
be willing issue its own securities in a transparent fashion. In the following sections, I will assess the size
and regulation of the bond markets; types of bonds and bondholders; and access for foreign investors.
Size and Structure
The Chinese bond market accounts for 41 percent of market capitalization (USD$3.4 trillion), while the
stock market accounts for 44 percent (USD$3.7 trillion), and the banking sector accounts for 128 percent
($10.7 trillion). In comparison, the bond market in the United States accounts for 240 percent of market
capitalization, or USD$38 trillion – double the size of the U.S. stock market, and triple the size of the
banking sector. 27
With comparison to other Asian and emerging markets, the Chinese bond market accounts for a
small percentage of market capitalization, as well. The bond market (as share of GDP) is comparatively
greater in Japan, South Korea, Singapore, Thailand and Hong Kong. (See figure below.) For this reason,
many scholars argue that the Chinese bond market is weak. However, in absolute terms, China has the
fourth-largest bond market in the world, of which government bonds are the majority.
10
Source: Goldman Sachs Global Liquidity Management: China’s Bond Market
Source: Brookings Institution John L. Thornton China Center
11
The market for bonds includes the exchange market (regulated by the China Securities Regulatory
Commission), the inter-bank market (regulated by the People’s Bank of China), and the over-the-counter
market. The share of depository holdings in the bond market has shifted dramatically in recent years. In
1997, the inter-bank depository accounted for about 30 percent of outstanding government bonds,
compared to 51 percent for the exchange market and 19.4 percent for the over-the-counter market. In
2012, the inter-bank depository accounted for more than 93 percent of outstanding government bonds.28
Types of Bonds and Bondholders
There are four categories of bonds in China: government bonds, Central Bank notes, financial bonds, and
non-financial corporate bonds. Government bonds are issued by the Ministry of Finance or local
governments to fund government spending. Central Bank notes are short-term securities issued by the
People’s Bank of China that assist in implementing monetary policy. Financial bonds are issued by
commercial banks and policy banks, and are backed by a central government guarantee. Finally, nonfinancial corporate bonds are issued by state-owned and private companies.29
In 2012, government bonds totaled 6.67 trillion RMB, while corporate bonds totaled 1.98 trillion
RMB, and policy bank bonds totaled 7.25 trillion RMB. Commercial banks are the largest holders in the
overall Chinese bond market: They own 35 percent of corporate bonds; 66 percent of government bonds;
and 84 percent of policy bank bonds.30 Insurance companies, mutual funds, and others, including the
People’s Bank of China, the Ministry of Finance, policy banks, and the China Securities Depository and
Clearing Corporation, account for the remaining 16 percent.31
12
Source: Brookings Institution John L. Thornton China Center
Corporate bonds have historically made up a small proportion of the bond market, as a result of
regulations that encouraged companies to gain capital through bank loans, rather than by issuing bonds.
The National Development and Reform Commission, the People’s Bank of China, and the China
Securities Regulatory Commission share responsibility in issuing bank loans, and navigating the
complicated approval process has proved inhibitive for many companies. In recent years, however, the
three departments have worked to simplify the process of issuing corporate bonds. Consequently, the
number of corporate bonds has increased rapidly, from fewer than 200 in 2005 to 484 in 2012. Today,
corporate bonds account for about 30 percent of the total bond market (2.3 trillion RMB). 32 This includes
Small and Medium Sized Enterprise Collective Notes, which allow China’s SMEs to reduce risk by
issuing debt as a group of entities.33
13
Corporate bonds have risen steadily as a percentage of the overall bond market over the past twenty years. Today
they total more than 2.3 trillion RMB or 30 percent of the bond market. Note: CGBs refers to Chinese government
bonds. Source: Brookings Institution John L. Thornton China Center
Foreign Investors
Foreign investors can access the Chinese bond market through two programs. First, the Qualified Foreign
Institutional Investor program, established in 2002, permits licensed foreign investors to access the interbank and exchange markets. Foreign investors transfer U.S. currency to a QFII account, where it is
converted to RMB. Then, the investor is permitted to invest in the bond market, as well as purchase Ashares on the Shanghai and Shenzhen Stock Exchanges. By the end of 2012, more than 170 foreign
institutional investors had been approved to participate in the program, with a quota of USD$37.4 billion.
The second program, launched in 2010, permits investment by foreign central banks, Hong Kong and
Macao lenders, and overseas banks involved in cross-border trade. According to a report by Goldman
Sachs, the Chinese bond market may be attractive to foreign investors because of the high yields of
government bonds and strong sovereign credit quality.34
14
Conclusion
In the first section, I assessed the development of the Chinese stock markets, which consist of the
Shanghai and Shenzhen Stock Exchanges. I found that the Chinese stock markets are large and highly
volatile. If you combine the Shanghai and Shenzhen Stock Exchanges, China has the second-largest
market for equity in the world, second only to the United States. The market has recent annual turnover
ratios of 341 percent, as well. This volatility may be attributed to the poor legal protection for
shareholders, which encourages speculative behavior rather than long-term investments in company
performance.
The Chinese government plays a significant role in the Chinese stock markets, as well. The
government strictly regulates who can issue and trade shares, applying an implicit quota system to initial
public offerings and preventing foreign firms from selling shares. The top-ten firms in the stock
exchanges are state-owned, and the government is the majority shareholder. Yet the supervisory power
of the China Securities Regulatory Commission remains quite weak, so insider trading and other illegal
activity remains widespread.
In the second section, I assessed the development of the Chinese bond markets. I found that the
Chinese bond market accounts for a small percentage of market capitalization when compared to other
developed and emerging markets, since its banking sector is comparatively large. Yet in absolute terms,
China has the fourth-largest market for bonds in the world. Government bonds make up the largest share
of the market, and commercial banks are the largest bondholders. However, the corporate bond market
is rapidly growing. Finally, there are limited but increasing options for foreigners to enter the bond
market, through the Qualified Foreign Institutional Investor program, as well as a program for overseas
banks.
15
Looking to the future, the Chinese government must continue to develop its stock and bond
markets, including corporate bonds, in order to diversify the risk associated with majority funding from
state-owned banks. Additionally, the government should institute more legal protections for
shareholders, which may reduce destabilizing speculator behavior; and increase the size and power of
the China Securities Regulatory Commission’s supervisory office, in order to win the trust of foreign and
domestic investors. Finally, the government should loosen restrictions on initial public offerings, and
move toward decreasing the percentage of government shareholding. While the capital markets were
initially created to increase funding for state-owned enterprises, it is now time to foster the growth and
improve the international integration of China’s private sector, as well.
16
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1
Ding Chen. “Developing a Stock Market Without Institutions—The China Puzzle.” Journal of Corporate Law Studies. April
2013.
2
Douglas J. Elliott and Kai Yan. “The Chinese Financial System: An Introduction and Overview.” John L. Thornton China
Center at Brookings. July 2013.
3
Douglas J. Elliott and Kai Yan. “The Chinese Financial System: An Introduction and Overview.” John L. Thornton China
Center at Brookings. July 2013.
17
4
Douglas J. Elliott and Kai Yan. “The Chinese Financial System: An Introduction and Overview.” John L. Thornton China
Center at Brookings. July 2013.
5
Investopedia. “Stock Basics: What Are Stocks?” Accessed at
<http://www.investopedia.com/university/stocks/stocks1.asp>
6
Class discussion. “Financial Sector Developments and Reform in Emerging Markets.” October 22, 2013.
7
Douglas J. Elliott and Kai Yan. “The Chinese Financial System: An Introduction and Overview.” John L. Thornton China
Center at Brookings. July 2013.
8
David Beim and Charles Calomiris. Emerging Financial Markets. McGraw-Hill (2001).
9
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10
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11
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12
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13
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14
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15
Douglas J. Elliott and Kai Yan. “The Chinese Financial System: An Introduction and Overview.” John L. Thornton China
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16
Douglas J. Elliott and Kai Yan. “The Chinese Financial System: An Introduction and Overview.” John L. Thornton China
Center at Brookings. July 2013.
17
Douglas J. Elliott and Kai Yan. “The Chinese Financial System: An Introduction and Overview.” John L. Thornton China
Center at Brookings. July 2013.
18
Ding Chen. “Developing a Stock Market Without Institutions—The China Puzzle.” Journal of Corporate Law Studies. April
2013.
19
Douglas J. Elliott and Kai Yan. “The Chinese Financial System: An Introduction and Overview.” John L. Thornton China
Center at Brookings. July 2013.
20
Jiangyu Wang. “Dancing with Wolves: Regulation and Deregulation of Foreign Investment in China’s Stock Market.” AsianPacific Law & Policy Journal. Vol. 5 (2004)
21
Ding Chen. “Developing a Stock Market Without Institutions—The China Puzzle.” Journal of Corporate Law Studies. April
2013.
22
Ding Chen. “Developing a Stock Market Without Institutions—The China Puzzle.” Journal of Corporate Law Studies. April
2013. 167.
23
Lu Yuan, Wang Ziwu and Zheng Fe. “Can Anyone Save Stock Market Supervision?” Caixin Online. March 19, 2012.
Accessed at <http://english.caixin.com/2012-03-19/100369865.html?p3>
24
Douglas J. Elliott and Kai Yan. “The Chinese Financial System: An Introduction and Overview.” John L. Thornton China
Center at Brookings. July 2013.
25
“China May Allow Foreign Firms to Sell Shares in Free-Trade Zone.” Wall Street Journal. October 14, 2013. Accessed at
<http://online.wsj.com/news/articles/SB10001424052702303376904579134871148986470>
26
Investopedia. “Bond Basics: What are Bonds?” Accessed at
<http://www.investopedia.com/university/bonds/bonds1.asp>
27
Douglas J. Elliott and Kai Yan. “The Chinese Financial System: An Introduction and Overview.” John L. Thornton China
Center at Brookings. July 2013.
28
Jennie Bai, Michael Fleming, Casidhe Horan. “The Microstructure of China’s Government Bond Market.” Federal Reserve
Bank of New York Staff Reports (No. 622). May 2013. <http://www.newyorkfed.org/research/staff_reports/sr622.pdf>
29
Goldman Sachs Global Liquidity Management. “FAQ: China’s Bond Market.” 2013. Accessed at
<http://www.goldmansachs.com/gsam/docs/fundsgeneral/general_education/economic_and_market_perspectives/china_
bond_market_faq.pdf>
30
Douglas J. Elliott and Kai Yan. “The Chinese Financial System: An Introduction and Overview.” John L. Thornton China
Center at Brookings. July 2013.
31
Jennie Bai, Michael Fleming, Casidhe Horan. “The Microstructure of China’s Government Bond Market.” Federal Reserve
Bank of New York Staff Reports (No. 622). May 2013. <http://www.newyorkfed.org/research/staff_reports/sr622.pdf>
32
Douglas J. Elliott and Kai Yan. “The Chinese Financial System: An Introduction and Overview.” John L. Thornton China
Center at Brookings. July 2013.
18
33
“China’s Capital Markets: The Changing Landscape.” KPMG. 2011. Accessed at
<http://www.kpmg.com/cn/en/IssuesAndInsights/ArticlesPublications/Documents/China-Capital-Markets-FTSE201106.pdf>
34
Goldman Sachs Global Liquidity Management. “FAQ: China’s Bond Market.” 2013. Accessed at
<http://www.goldmansachs.com/gsam/docs/fundsgeneral/general_education/economic_and_market_perspectives/china_
bond_market_faq.pdf>
19