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China debt crunch

China lures foreign debt buyers despite corporate default fears

Offshore investors eye bonds from quasi-sovereign 'policy banks'

Institutions such as the Export-Import Bank of China are viewed as offering investors a quasi-sovereign low level of risk. (Source photos by Reuters and AP)

HONG KONG -- Global investors are warming to Chinese bonds after a temporary sell-off and are looking at safer alternatives beyond sovereign debt to tap higher yields and boost returns.

Attracting increasing attention are bonds issued by Chinese "policy banks," which channel public funds to areas such as trade, infrastructure and agriculture. The banks in question -- China Development Bank, the Agricultural Development Bank of China and the Export-Import Bank of China -- are state-owned and viewed as offering a quasi-sovereign low level of risk, while still offering higher yields than bonds issued directly by the Chinese government.

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