1. The bond market maintained stable growth

In 2022, the bond market saw a total issuance of RMB61.9 trillion, basically the same as the previous year. Specifically, RMB56.0 trillion of bonds were issued in the interbank bond market, up by 5.4 percent year on year, while issuances in the exchange-traded bond market totaled RMB5.8 trillion. In 2022, the issuances of treasury bonds, local government bonds, financial bonds, corporate credit bonds,1 credit asset-backed securities, and interbank certificates of deposit (CDs) reached RMB9.6 trillion, RMB7.4 trillion, RMB9.8 trillion, RMB13.8 trillion, RMB334.54 billion, and RMB20.5 trillion, respectively.

As of end-December 2022, outstanding bonds in custody in the bond market increased by RMB11.3 trillion year on year to reach RMB144.8 trillion, including RMB125.3 trillion in the interbank bond market and RMB19.5 trillion in the exchange-traded bond market. Commercial bank over-the-counter (OTC) bonds in custody recorded an outstanding amount of RMB41.61 billion

2. Treasury yields saw mixed movements

At end-December 2022, the yields on 1-year and 3-year treasury bonds stood at 2.10 percent and 2.40 percent, down by 15bps and 5bps year on year, respectively, while the yields on 5-year, 7-year, and 10-year treasury bonds stood at 2.64 percent, 2.82 percent, and 2.84 percent, up by 4bps, 4bps, and 6bps year on year, respectively. At end-2022, the ChinaBond Treasury Bond Aggregate Index closed at 213.7, up by 7.1 year on year; and the ChinaBond New Composite Index (Full Price) closed at 122.1, up by 0.6 year-on-year.

In December 2022, the monthly weighted average interest rate for interbank lending was 1.26 percent, down by 76bps from a year earlier; and the monthly weighted average interest rate on pledged repos stood at 1.41 percent, down by 68bps from a year earlier.

3. The opening-up of the bond market saw steady, orderly progress

As of end-2022, overseas institutions held RMB3.5 trillion, or 2.4 percent, of the outstanding bonds in custody in China’s bond market. Specifically, their holdings in the interbank bond market amounted to RMB3.4 trillion. By bond type, overseas institutions held RMB2.3 trillion, or 67.7 percent, of treasury bonds, and RMB0.7 trillion, or 22.0 percent, of policy financial bonds.

4. Investors in the bond market continued to increase

As of end-2022, by legal person status, there were 2,172 holders of debt-financing instruments issued by non-financial enterprises (“nonfinancial debt financing instruments” for short).2 By the size of bond holdings, the top 50 investors, mainly including fund companies, large state-owned commercial banks, and securities companies, held 51.9 percent of the total, while the top 200 investors held 82 percent. The biggest, smallest, average, and median numbers of holders for a nonfinancial debt financing instrument were 65, 1, 12, and 11, respectively, while 91 percent of non-financial debt financing instruments were each held by fewer than 20 investors. In 2022, the top 50 investors by the volume of trading of non-financial debt-financing instruments conducted 49.7 percent of the transactions. They mainly included securities companies, joint-stock commercial banks, and city commercial banks. Transactions by the top 200 investors accounted for 83.1 percent.

5. Money market trading grew continuously

In 2022, interbank money market transactions totaled RMB1527.0 trillion, increasing by 31.2 percent year on year. Specifically, pledged repo transactions rose by 32.1 percent year on year to RMB1374.6 trillion; outright repo transactions climbed by 17.4 percent year on year to RMB5.6 trillion; and interbank lending transactions reached RMB146.8 trillion, increasing by 23.6 percent year on year. Repo transactions of exchange-traded standard bonds grew by 15.2 percent year on year to RMB403.6 trillion. In 2022, the total turnover of cash bond trading in the interbank bond market reached RMB271.2 trillion, with the daily average standing at RMB1089.3 billion. Most of the transactions posted a turnover between RMB5 million and RMB50 million or above RMB90 million. The average value per trade was RMB510.7 billion. The turnover of cash bond trading in the exchange-traded bond market amounted to RMB38.1 trillion, averaging RMB157.49 billion per day. A total of 1,684,000 transactions were done in the OTC bond market, with a total turnover of RMB213.45 billion. As of end-2022, OTC bond trading businesses were conducted in 28 commercial banks, one more than a year earlier.

6. Both accepted and discounted bills outstanding saw year-on-year rises

In 2022, commercial drafts that were accepted totaled RMB27.4 trillion, while those discounted amounted to RMB19.5 trillion. As of end-2022, the outstanding amount of accepted commercial drafts stood at RMB19.1 trillion, rising by 15.2 percent from a year earlier, while those discounted registered RMB13.0 trillion, an increase of 29.1 percent year on year.

In 2022, a total of 213,000 micro, small, and medium-sized enterprises (MSMEs) issued bills, accounting for 94.5 percent of all the issuing enterprises. Bills issued by MSMEs reached RMB17.8 trillion, representing 64.9 percent of the total issuance. Of all the enterprises that discounted bills, 327,000, or 97.1 percent, were MSMEs. The bills they discounted registered RMB14.2 trillion, accounting for 72.9 percent of the total amount of discounted bills

7. Interbank derivatives turnover remained stable

In 2022, interbank RMB interest rate derivatives trading saw a total turnover of RMB21.3 trillion, almost unchanged from a year earlier. Specifically, notional principal amounts in interest rate swaps totaled RMB21.0 trillion, roughly the same as the previous year; trading of standardized bond forwards saw a total turnover of RMB260 billion; notional principal amounts in credit risk mitigation warrants that had been created posted RMB26.8 billion; and notional principal amounts in credit default swaps reached RMB2.4 billion. Treasury futures saw a total turnover of RMB46.4 trillion, up by 68.7 percent year on year. The swap interest rates moved in mixed directions. At end-2022, 1-year FR007 closed at an average of 2.19 percent, down by 3bps year on year, while 5-year FR007 closed at an average of 2.77 percent, up by 21bps year on year.

8. Major stock indexes dropped

At end-2022, the SSE Composite Index closed at 3089.3, down by 550.5 points or 15.1 percent from end-2021, while the SZSE Component Index closed at 11016.0, down by 3841.4 points or 25.9 percent from end-2021. Turnover on the Shanghai and Shenzhen Stock Exchanges totaled RMB224.5 trillion for the full year, down by 13.0 percent year-on-year.