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JPMorgan Steps Away from Reducing China EM Bond Allocation in Index.

CHINA
  • A proposal had been put forward for the GBI-EM Index allocation for China be reduced to 6% from 10%.
  • The index was tracked by approximately US236bn in fixed income assets globally in 2023, the most widely used index.
  • Chinese bonds were included in 2020.
  • Recently India was admitted to the index resulting in a surge in demand for Indian bonds.
  • Saudi Arabia and Philippines admission is currently under review.
  • A reduction in China’s allocation it was argued would reduce the impact in the benchmark from larger markets.
  • However a reduction in China’s allocation could negatively impact foreign capital flows for China at a time when the economy has challenges.

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