The repo market is now by far the largest fixed-income and money market in China. Repo turnover in 2021 of CNY 1,395.4 trillion compares with CNY 214.5 trillion cash trading in bonds and CNY 118.8 trillion in unsecured interbank lending. The size and growth of the repo market mirrors that of the underlying pool of Chinese fixed-income securities (about CNY 134 trillion or USD 21 trillion in terms of outstanding value at the end of 2021, making it the second largest bond market in the world after the US).
The scale of the repo market in China suggests that it should be compared with other large repo markets around the world rather than its smaller Asian neighbours. Japan is an obvious choice given its geographical proximity. Other repo markets of comparable size are the eurozone, the UK and the US. In comparison with these counties, the Chinese repo market present a mixed picture. Like most countries with developed repo markets, China’s debt-to-GDP and repo-to- cash turnover ratios are relatively high but its turnover-to-stock ratio of government securities is closer to most emerging Asian repo markets.
The full report is available at https://mcusercontent.com/b205184c508371a5b962c65f8/files/f0dc9c74-a1b8-eeab-e946-4a3bb7bc3bb7/ICMA_Guide_to_Asia_Repo_Markets_China_Oct_2022.pdf