China’s Battle of the Bonds Has Supply Surge Adding X-Factor (1)

At a time when China is striving to put a floor on falling yields, a doubling of government bond issuance will offer a ray of hope.

Cinda Securities Co. is projecting net issuance of 1.4 trillion yuan ($195.7 billion) this month, up about 780 billion yuan from July. Huaxi Securities Co. sees sales of around 1.6 trillion yuan to 1.8 trillion in August. Standard Chartered Plc and Societe Generale SA are also predicting an increase.

Rising debt issuance comes at a time when concerns over a slowing economy, expectations for central bank policy easing and a lack of attractive investment ...