China Property Bonds 'Attractive' in Offshore Market: AllianceBernstein

The video discusses the pricing of risk in the China credit market, highlighting low default rates due to government-backed entities. It explores the role of local government bonds in supporting infrastructure spending and the economy. The video identifies opportunities in the offshore credit market, particularly in Chinese property bonds, and discusses investment strategies amid uncertainties in US-China relations and market dynamics.

What is the main reason for the low default rate in the China credit market?

• High private sector default rates

• Majority of issuances are government-related

• Lack of credit risk

• High interest rates

How does the local government bond issuance support the economy?

• By increasing private sector spending

• By decreasing interest rates

• By supporting infrastructure spending

• By reducing taxes

What is the expected outcome of increased local government bond spending?

• Reduction in government debt

• Increase in private sector defaults

• Recovery in fixed asset investment

• Decrease in public spending

Why are Chinese property bonds considered attractive in the offshore market?

• Deleveraging of property companies

• Stable market conditions

• Increasing land purchases

• High default risk

What strategy is suggested for investors given the uncertainties in US-China relations?

• Avoiding the credit market

• Investing in high-risk assets

• Focusing on short-term gains

• Finding stable income streams