China may pay less to sell 20-year bonds than it did a year ago as economic growth spurs savings, giving banks more money to invest in local debt securities.
The government plans to sell 30 billion yuan ($3.75 billion) of bonds maturing in 2026 this week. The 20-year bonds sold in May 2005 yield 3.58 percent, down from 4.11 percent when they were auctioned.
Chinese bonds are rising as banks, flush with cash, snap up securities and the government limits debt sales. While Japan, the world’s biggest borrower, has about $6.5 trillion of debt, and the U.S. has $4.2 trillion of bonds, China has the equivalent of about $325 billion, according to the Chinabond Web site , which is run by a state-owned clearing and settlement house [Full text]