China central bank chief touted yuan assets to investors, Bloomberg News reports

China's central bank governor, Pan Gongsheng, recently showcased the potential of yuan assets to investors during a closed-door event in Bangkok, according to Bloomberg News. Pan emphasized the stability of Chinese assets, particularly government bonds, which can provide diversification benefits to investment portfolios. He cited data demonstrating that a portfolio consisting of 80% yuan bonds and 20% Chinese equities outperformed a global asset portfolio over the past two decades in terms of annual returns.

Furthermore, Pan highlighted that the yuan portfolio exhibited lower volatility compared to global benchmarks over five and 10-year periods, as reported by the People's Bank of China chief. In response to the growing interest in yuan bonds, Pan announced plans to align regulations more closely with global standards and promote their acceptance as eligible collateral at major international clearing houses, as stated by attendees at the event.

As governments and state entities increasingly seek alternative funding sources due to rising competition for capital, including in local currency markets such as the Chinese renminbi, the potential of yuan assets in the global market continues to gain traction, as noted by Stephanie von Friedeburg, Citi's global head of public sector group.