Bond Market Morning Briefing March 16 | February New Social Financing Increased by 2.38 Trillion Yuan, Authoritative Experts Interpret That Financial Aggregate is Expected to Maintain Reasonable Growth; Police Crack Down on Illegal Sale of Long-term Suspended Bond Case

Bond Market News

【China-U.S. Economic and Trade Negotiations Begin in Paris, France】

On the morning of March 15, local time, China and the U.S. economic and trade teams started negotiations in Paris, France.

【Li Qiang Chairs State Council Executive Meeting to Study Establishing a Negative List Management Mechanism for Local Fiscal Subsidies】

On March 13, Premier Li Qiang presided over an executive meeting of the State Council to discuss establishing a negative list management system for local fiscal subsidies. The meeting emphasized that standardizing local subsidy policies is significant for maintaining fair competition and advancing the construction of a unified national market. Based on previous work, a negative list for local fiscal subsidies will be implemented, and a unified national negative list will be developed to clearly specify situations where local governments are prohibited from providing subsidies.

【Latest Financial Data Released: Social Financing Increment of 9.6 Trillion Yuan in the First Two Months】

On March 13, the People’s Bank of China announced that, preliminarily, the total social financing increment for the first two months of 2026 was 9.6 trillion yuan, an increase of 316.2 billion yuan compared to the same period last year. Among these, RMB loans to the real economy increased by 5.75 trillion yuan, a decrease of 124.8 billion yuan year-on-year; foreign currency loans to the real economy, converted into RMB, increased by 433 billion yuan, up 1.105 trillion yuan from last year; entrusted loans decreased by 37.3 billion yuan, a reduction of 59.3 billion yuan year-on-year; trust loans increased by 30.5 billion yuan, up 1.2 billion yuan; undiscounted bank acceptance bills increased by 453.8 billion yuan, up 287 billion yuan; corporate bonds net financing was 655.4 billion yuan, an increase of 39.8 billion yuan; net government bond financing was 2.38 trillion yuan, a decrease of 9.4 billion yuan; and domestic equity financing for non-financial enterprises was 74.5 billion yuan, up 19.5 billion yuan.

Analysis: Huayuan Fixed Income states that in February, social financing increased by 2.38 trillion yuan (compared to 2.23 trillion yuan in February 2025), slightly higher year-on-year, mainly driven by RMB loans to the real economy and undiscounted bank acceptance bills. RMB loans to the real economy increased by 84.84 billion yuan in February, up 19.56 billion yuan from last year; entrusted loans decreased by 1.81 billion yuan; trust loans increased by 30.9 billion yuan; undiscounted bank acceptance bills decreased by 175.5 billion yuan; corporate bonds net financing was 152.1 billion yuan; and government bonds net financing was 1.40 trillion yuan. The social financing growth rate at the end of February remained flat at 8.2% compared to the previous month. Looking ahead to 2026, it is expected that new loans (under the social financing umbrella) will slightly decrease year-on-year, government bond net financing will be close to the previous year, and social financing growth will slightly decline, with the end-of-year growth rate around 7.5%.

A market insider told Caixin that data shows that in terms of fiscal policy, the new government bond issuance in 2026 has reached nearly 12 trillion yuan, a record high, with strong issuance in the first two months—government bonds and local government bonds increased by 12.2% and 8.5% respectively year-on-year—supporting social financing scale. Experts believe that since March, enterprises have gradually resumed work after the holiday, with financing needs accelerating. Coupled with the detailed implementation of policies after the “Two Sessions,” major projects under the “14th Five-Year Plan” are speeding up, which is expected to steadily release supporting financing demand. The total financial volume is likely to continue reasonable growth. Experts also emphasize exploring ways to increase residents’ property income, such as optimizing government bond issuance structure and increasing the issuance scale of savings bonds, which can further enhance the synergy between fiscal and monetary policies, boosting residents’ income and consumption potential.

【Regulatory Crackdown on Personal Loan Interest and Fee Confusion! Financial Regulatory Authorities and PBOC Issue Statements: Full Transparency of Interest and Fees—What Are the Substantive Impacts on Institutions and Borrowers?】

On March 15, the China Banking and Insurance Regulatory Commission (CBIRC) and the People’s Bank of China (PBOC) issued the “Regulations on Clear Disclosure of Personal Loan Comprehensive Financing Costs,” requiring that from August 1, 2026, loan institutions must display a clear comprehensive financing cost disclosure form to borrowers. “In recent years, China’s personal loan market has developed rapidly, but issues such as irregular and non-transparent interest and fee disclosures have emerged, which can lead to financial consumer disputes, affect the effectiveness of interest rate policies, and weaken the quality of financial services to the real economy,” a relevant official from the CBIRC told Caixin. He stressed that establishing regulatory rules for personal loan chaos is very important.

A PBOC official also told Caixin that implementing the “Personal Loan Comprehensive Financing Cost Disclosure Form” will promote transparency and sunshine in personal loan costs, fostering healthy industry development. Previously, the PBOC guided pilot commercial banks to clearly display the annualized comprehensive financing costs to enterprises, including intermediary and hidden costs. After the rollout of the comprehensive disclosure form, personal financing costs will become transparent and understandable.

【Ministry of Finance: Improving the Negative List for Special Bond Use and Adjusting the Scope of Self-Review Pilot Projects for Special Bonds】

The “Report on the Implementation of the 2025 Central and Local Budget and the Draft 2026 Budget” was released. The report emphasizes expanding effective investment. It advocates making good use of ultra-long-term special national bonds, special bonds, and central budget investments, focusing on new productive forces, new urbanization, and comprehensive human development to improve investment quality and efficiency. It plans to allocate 800 billion yuan of ultra-long-term special bonds for “dual” construction, adhering to a top-down approach that emphasizes both soft and hard infrastructure, and appropriately increasing central investment subsidies to better reflect national strategic intentions. The scope of the negative list for special bond use will be improved, and the self-review pilot scope for special bond projects will be adjusted accordingly, with more emphasis on provincial coordination. The special bond quota for project construction will be increased and allocated to regions with thorough project preparation and good fund utilization. The central budget investment will be 755 billion yuan, an increase of 20 billion yuan. Strengthening full-process supervision of government investment funds, promoting project reserves and early preparations, improving project maturity and feasibility, and preventing idle funds, misappropriation, and diversion.

【CSRC: Monitoring International and Domestic Market Changes, Strengthening Intermarket and Derivative Market Coordination】

On March 13, Wu Qing, Secretary of the Party Committee and Chairman of the China Securities Regulatory Commission (CSRC), presided over an expanded Party Committee meeting. The meeting pointed out the need to strengthen bottom-line thinking, closely monitor changes in international financial markets and internal/external environments, and enhance coordination and supervision of domestic and foreign, futures, and spot markets. The goal is to consolidate and strengthen the unique Chinese-style market stability mechanism and promote listed companies to improve governance and value, further enhancing market stability.

【Police Crack Down on Illegal Long-Suspended Bond Sales, Over 200 Million Yuan Involved】

According to CCTV News, Shanghai police recently cracked a major illegal operation involving inducement of investors to buy suspended bonds, arresting over 30 suspects involved in bond-related crimes, with the case involving more than 200 million yuan.

【Shanghai Clearing House Publishes Draft Amendments to Business Rules for Centralized Clearing (Public Consultation)】

Shanghai Clearing House has systematically revised the “Rules for Centralized Clearing Business of the Interbank Market Clearing Corporation,” producing a draft for public consultation. The draft is open for feedback via letter, email, or fax. The deadline for feedback is March 26, 2026 (10 working days from the date of this announcement).

【Clarifying the “Opaque” Disclosure Area: CFA Clarifies Private Fund Disclosure Requirements, Fully Revealing Underlying Assets】

On March 13, the Asset Management Association of China (AMAC) publicly solicited opinions on the “Implementation Rules for Private Investment Fund Information Disclosure.” The draft sets clear standards for private fund disclosures through quantitative indicators, penetration requirements, and standardized templates. The CSRC issued the “Measures for Supervision and Administration of Private Investment Fund Information Disclosure” at the end of February. AMAC stated that to implement these measures, it drafted the “Implementation Rules for Private Investment Fund Information Disclosure” and other documents for public comment. Industry experts say that the “Measures” are the first administrative regulation implementing the 2023 State Council’s “Private Investment Fund Supervision and Regulation Regulations,” filling a regulatory gap. The draft further details disclosure requirements for net asset value, financial status, leverage, related-party transactions, cross-border investments, illiquid assets, annual financial reports, manager reports, and custodian reports.

【Half-Month Issuance Surpasses Entire Month of Last Year! Panda Bonds Continue Hot in March, Institutions Recommend Exploiting “Carry Trade and Leverage” Strategies】

The Panda bond market has grown significantly in recent years. According to China Chengxin Research, by 2025, the total issuance of Panda bonds exceeded 1 trillion yuan, reaching 1.159 trillion yuan. In 2025, issuance surpassed 180 billion yuan, ranking second in history, with nearly 50% issued by purely offshore entities, a record high. The maturity structure is shifting toward medium and long-term, with 3-year and 5-year bonds dominating. Bonds with a maturity of 5 years or more accounted for over 30% in 2025, reflecting increasing investor confidence in long-term Panda bonds. In March, the market remains highly active. Data from Caixin’s Yujingtong shows that in just the first two weeks of March, issuance reached 15.5 billion yuan, already exceeding the total issuance of 13 billion yuan in March 2025.

Shenwan Hongyuan forecasts that in 2026, the bond market may continue to show “low interest rates and high volatility.” With inflation expectations improving and risks of long-term rate hikes, short- to medium-term credit bonds with carry and leverage strategies have high relative value amid stable funding rates. Due to their shorter duration, Panda bonds align well with institutional preferences. Continued RMB internationalization is expected to sustain high growth, and opportunities in niche segments are worth attention.

【Overseas Capital Favors Dim Sum Bonds, Market Booming】

Wind data shows that by the end of 2025, the outstanding Dim Sum bond market was about 1.3 trillion yuan. In the first two months of this year, issuance and fundraising reached 276 issues and 230.69 billion yuan, respectively—30% higher than the same period last year. The low interest rate environment in China attracts foreign companies, tech firms, and foreign governments to use Dim Sum bonds as a key financing tool. “Dollar-denominated bonds often have issuance rates above 4%, while most Dim Sum bonds are below 3%,” said Zhang Haotian. Additionally, amid escalating geopolitical risks like conflicts in the Middle East, global capital is increasingly interested in RMB assets for diversification.

【150 Million Yuan Fine! Tianfeng Securities’ Penalty Officially Enforced, Company Responds】

On March 13, Tianfeng Securities announced that, due to suspected information disclosure violations and illegal financing for shareholders, it received an “Administrative Penalty Decision” from the Hubei CSRC. The penalty is consistent with the “Notice of Administrative Penalty” issued a month earlier, indicating the process is complete. On the same day, Tianfeng Securities also received a “Decision” from the Fujian CSRC regarding disclosure violations related to its holdings in Yongan Forest. The firm was warned and fined a total of 15 million yuan. Former Chairman Yu Lei and former Vice President and CFO Xu Xin, among other senior executives, received warnings and fines; Yu Lei and Xu Xin were also permanently barred from the securities market.

Tianfeng Securities responded that the penalties are a comprehensive cleanup of historical issues from the private sector shareholder period. The company accepts and will implement them, believing that the risks from the past have been thoroughly resolved and that the rectification is solid. Currently, operations are stable, and the company is entering a new stage of steady development.

【“Almost No Evidence”—U.S. Judge Dismisses Subpoena for Fed Chair Powell】

On March 13, a U.S. federal judge announced he would dismiss the Department of Justice’s subpoena for Federal Reserve Chair Jerome Powell, citing “almost no evidence.” Chief Judge James Boasberg of the U.S. District Court in Washington, D.C., stated in a court document: “There is substantial evidence that the government issued these subpoenas to pressure Fed Chair Powell to support rate cuts or to force his resignation.” Boasberg concluded that the subpoenas were issued for improper purposes and decided to revoke them. Since January 2025, relations between the White House and Powell have been tense. Former President Trump has repeatedly criticized Powell for not cutting rates significantly and has pressured him in various ways, including demanding his resignation. On January 9, 2025, the Justice Department served a subpoena on the Fed, threatening criminal proceedings if Powell testifies before the Senate Banking Committee on the Fed’s renovation project.

Open Market Operations:

The PBOC announced on March 13 that it conducted a 375 billion yuan 7-day reverse repo operation at a fixed rate of 1.40%, with bids totaling 375 billion yuan and all bids successful. The same day, 448 billion yuan of reverse repos matured, resulting in a net liquidity withdrawal of 73 billion yuan. This week, 1.765 trillion yuan of reverse repos will mature, with maturities of 485 billion, 395 billion, 265 billion, 245 billion, and 375 billion yuan from Monday to Friday. Additionally, 600 billion yuan of 182-day buyback reverse repos will mature on Monday.

On March 13, the PBOC announced it will conduct a 5,000 billion yuan 6-month buyback reverse repo on March 16, representing a net reduction of 1 trillion yuan in this maturity segment for March. Since the 3-month buyback reverse repo was reduced by 2 trillion yuan earlier, the total net liquidity withdrawal for March across both maturities will be 3 trillion yuan—the first such net withdrawal since June 2025. Market analysts say that this does not indicate a tightening of medium- to long-term liquidity, as the PBOC will use various tools to keep liquidity stable and ample. As March is a quarter-end month, liquidity fluctuations will mainly be driven by cross-season factors. The market expects a pattern of “stability in the first half and slight tightening at month-end.” Some also advise closely monitoring the MLF operations in March.

Credit Bond Events

• Guangzhou Times Holding Group: Involved in a financial loan dispute, over 830 million yuan claimed;
• Sunac China: Subsidiary Xiangyang Rongfa Hongsheng Real Estate Development added 21.5 million yuan in unpaid debt;
• Jingtou Development: Plans to transfer real estate development assets and liabilities to controlling shareholder, likely constituting a major asset restructuring;
• Honyun International Debt Restructuring: Planning to issue 514 million shares to creditors;
• Kunshan Guoke Venture Capital: Issued 260 million yuan of investment bonds with a 1.96% coupon, fully guaranteed by Kunshan Chuangkou;
• Fujian Jiuxian Investment: Cancelled bondholder meeting for “23 Xian Investment 01/23 Jiuxian Bonds”;
• Fitch: Placed Long-term Issuer Rating of China Energy Group “BB-” on Negative Watch;
• CICC: Issued 2 billion yuan of notes at 1.90% interest rate backed by a guarantee;
• Xi’an Bank: 1.08% shares transferred to Xi’an Investment Holding, registration completed;
• 23 Lanjiao 01: Coupon rate lowered by 300 basis points to 3.3%.

Market Dynamics

【Money Market | Mixed Movements in Money Market Rates】

Last Friday, money market rates fluctuated. The weighted average rate of interbank pledged repo for 1-day maturity fell by 0.58 basis points to 1.3216%; 7-day fell by 0.88 basis points to 1.4616%; 14-day fell by 1.08 basis points to 1.4919%.

Shibor short-term rates all declined: overnight down 1.6 basis points to 1.321%; 7-day down 0.8 basis points to 1.457%; 14-day down 0.6 basis points to 1.495%; 1-month down 0.2 basis points to 1.533%.

Most interbank repo fixed rates declined: FR001 down 3.0 basis points to 1.40%; FR007 down 1.0 basis point to 1.52%; FR014 unchanged at 1.54%.

Interbank repo fixed rates all declined: FDR001 down 1.0 basis point to 1.32%; FDR007 down 1.78 basis points to 1.4522%; FDR014 down 2.0 basis points to 1.48%.

【Interest Rate Bonds | Long-term Bonds Adjust, Interbank Certificates of Deposit Yield Breaks 1.55%, Post-Data on Social Financing】

Last Friday, bond futures showed mixed results: 30-year main contract down 0.25% to 111.060 yuan; 10-year main contract down 0.07% to 108.220 yuan; 5-year main contract unchanged at 105.965 yuan; 2-year main contract unchanged at 102.466 yuan.

Most interbank yield rates for interest rate bonds fluctuated. As of 4:30 pm, the 10-year government bond active coupon 250016 yield rose 1 basis point to 1.821%; the 30-year government bond active coupon 2500006 yield rose 1.6 basis points to 2.289%; the 10-year policy bank bond 250220 yield rose 0.55 basis points to 1.9745%.

Analysts say that the recent adjustment is mainly driven by concerns over input-driven inflation caused by soaring oil prices. The medium-term support for bonds remains solid, and the correction may present buying opportunities. If interbank deposit rates decline, short-term allocations to wealth management and money market funds may increase bond holdings, providing short-term benefits to certificates of deposit and short-term bonds.

【Credit Bonds | Most Yields Decline, Total Trading Volume Shrinks to 110.4 Billion Yuan】

Last Friday, yields on most credit bonds declined, with spreads widening. Total trading volume was 110.4 billion yuan, a decrease. Top yields were on “23 AVIC Financial MTN001 (Tech Innovation Notes)”, “23 Industrial Finance 08”, and “24 Industrial Finance 02”, with yields of 33.42%, 17.49%, and 15.2%, respectively. Among AAA short-term notes, 1-year yields fell 0.61 basis points to 1.6248%; AA short-term notes also fell 0.61 basis points to 1.6948%. Among AAA urban investment bonds, 1-year yields fell 1.09 basis points to 1.6318%; AA urban investment bonds fell 0.08 basis points to 1.7098%.

One bond with over 2% increase: “23 AVIC Financial MTN001 (Tech Notes)”, “24 OCT MTN003”, “24 Yancheng Dongfang PPN003” rose 3.24%, 1.94%, and 1.27%, with transaction amounts of 66.36 million, 23.54 million, and 81.33 million yuan.

Five bonds with over 2% decline: “24 Industrial Finance 02”, “23 Green Port MTN002”, “23 Industrial Finance 11” fell 3.21%, 2.5%, and 2.41%, with transaction amounts of 4.49 million, 200.47 million, and 0.077 million yuan.

High-yield bonds: 135 bonds with yields above 5%, with top yields on “23 AVIC Financial MTN001 (Tech Notes)”, “23 Industrial Finance 08”, and “24 Industrial Finance 02” at 33.42%, 17.49%, and 15.2%, respectively, with transaction amounts of 66.36 million, 2.516 million, and 4.49 million yuan.

【European Bond Market | Yields Rise Across the Board, UK 10-Year Gilt Yield Up 5 Basis Points to 4.822%】

Last Friday, European bond yields rose across the board. UK 10-year gilt yield increased 5 basis points to 4.822%; France 10-year bonds rose 54.6 basis points to 3.669%; Germany 10-year bonds up 2.3 basis points to 2.977%; Italy 10-year bonds up 4.2 basis points to 3.786%; Spain 10-year bonds up 3.4 basis points to 3.491%.

【U.S. Bond Market | Yields Mixed, 2-Year U.S. Treasury Yield Down 2.58 Basis Points to 3.719%】

Last Friday, U.S. Treasury yields fluctuated: 2-year yield down 2.58 basis points to 3.719%; 3-year down 2.24 basis points to 3.736%; 5-year down 0.48 basis points to 3.860%; 10-year up 1.38 basis points to 4.277%; 30-year up 2.34 basis points to 4.906%.