China’s debt challenges were so bad its economy was supposed to be on the infamous treadmill to hell. And many expected the country’s efforts to rein in financial leverage to undermine demand for bonds. So it may come as some surprise that Chinese bonds are the top performers so far this year, among 70 markets in the Bloomberg Barclays Global Aggregate + China index, calculated in dollars. Other measures show the gain for yuan government and corporate debt, at nearly 2 per cent, is almost a mirror image of US bonds’ 1.6 per cent drop. While the rally in Chinese bonds -- spurred in part by authorities’ shift in recent ... (full story)