Capital flows back to China
Investors are moving money into Chinese bonds as a relative safe haven because low inflation and apparent preparedness for an oil shock make China look more resilient than many peers. At the same time, Beijing’s newly released 15th Five‑Year Plan sets a 2026 growth target of about 4.5–5% and emphasises innovation and stronger domestic demand, and at least one asset manager says supportive policy could lift Chinese stocks by roughly 10% this year. (reuters.com) (brookings.edu) (freepressjournal.in) (bloomberg.com)
Money is flowing back into Chinese bonds as investors look for shelter from the war-driven selloff hitting many other bond markets. (reuters.com) Reuters reported on April 14 that investors were buying Chinese debt on the view that low inflation and Beijing’s preparation for an oil shock reduce pressure for interest-rate hikes. The same report said Chinese inflows were arriving while other emerging markets were seeing selling. (reuters.com) Bloomberg reported on April 13 that Chinese stocks and bonds were rising together for the first time in two years as the United States-Iran war increased demand for perceived havens. Bloomberg said the 90-day correlation between the CSI 300 Index and the Bloomberg China Treasury Total Return Index turned positive from March 18. (bloomberg.com) China’s new 15th Five-Year Plan, adopted in March for 2026 through 2030, set a 2026 growth target of about 4.5% to 5% and put technology, innovation and domestic demand at the center of policy. Brookings said the plan shows Beijing pushing its economy from low-end manufacturing toward higher-end, technology-driven production. (brookings.edu) China’s State Council said on March 13 that the 15th Five-Year Plan would guide national development goals for 2026 to 2030 and play a “pivotal connecting role” in the country’s modernization drive. The World Economic Forum said the National People’s Congress formally adopted the plan earlier in March. (gov.cn) (weforum.org) That policy backdrop is feeding a broader market call on China. Bloomberg reported that Eurizon SLJ Capital chief executive Stephen Jen said on April 14 that Chinese stocks could rise about 10% by year-end because policy support is lifting growth while valuations remain discounted. (bloomberg.com) The bond case rests partly on relative stability in prices and energy exposure. CNBC reported on April 10 that China’s 10-year government bond yield stayed around 1.81% after the conflict began, while the 10-year United States Treasury yield rose nearly 50 basis points to 4.297%. (cnbc.com) China is not being treated as a pure growth story. Reuters’ April 13 poll found first-quarter growth likely improved on exports, but economists expected growth to cool later in 2026 as the Middle East crisis threatened profits and overseas demand. (reuters.com) That leaves investors balancing two ideas at once: slower global growth and a China market that, for now, looks more insulated than many peers. The result is a rare moment when Beijing’s long-term plan and a short-term flight to safety are pulling money in the same direction. (reuters.com)
