JPMorgan: China Credit — A K-Shaped Market
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JPMorgan reports that China remains the largest issuer in the Asian USD bond market, accounting for 28% of the J.P. Morgan Asia Credit Index (JACI) by market value. However, the overall size of China's USD bond market has contracted to $250 billion, with its share of the Asian market declining from a peak of 53% down to 28%. China dominates issuance across financial, quasi-sovereign, and investment-grade corporate bonds, yet it only constitutes 15% of the high-yield segment, which remains heavily weighted toward real estate.
In 2025, total issuance of Chinese USD bonds reached $72 billion, representing an 8% year-over-year increase and accounting for 40% of total Asian issuance. Quasi-sovereign issuers led this volume. Within the JACI financial sector, China holds a 36% share, followed by Hong Kong at 25% and South Korea at 13%. For investment-grade corporate bonds excluding financials, China represents a 32% market share.
The analysis also highlights China's positioning within the CEMBI Broad Diversified index, where it is the largest Asian issuer at a 15% market share. In the index's high-yield category, China's footprint shrinks to just 7%, with Macau and the Philippines leading the Asian region. Overall, the report illustrates that the China credit market exhibits a clear K-shaped divergence, characterized by strengthening investment-grade fundamentals contrasting with a diminishing high-yield real estate footprint.