The bond market has faced a surge in redemptions since late August due to tightened fund supply and relaxed controls in the real estate sector. This shift occurred when bank financing became uncertain, prompting retail investors to move their funds into safer options like deposits and insurance, and money and bond funds provided by mutual fund firms. To support the real economy and reduce financing costs, the Central Bank has lowered the deposit interest rate since 2020. However, the continuous decrease affects the credit market, local debt and fixed income investment. Moreover, the homogeneity of China’s financial products has hindered the implementation of risk hedging strategies during crises. Despite the potential risks, the Chinese financial market is advancing by adopting AI technologies to create more customized financial products and services. Additionally, environmental, social and governance (ESG) reports are starting to influence the evaluation of enterprises’ sustainability, a crucial factor in attracting investment.
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