Middle East crisis triggers global market turmoil; Chinese assets become the new "safe haven"

Since this year began, as the U.S. and Israel have carried out ongoing attacks against Iran, rising international geopolitical risk has also put global markets under pressure, with turmoil continuing across equities, gold, and bond markets. Against this backdrop, the Chinese market is becoming the “anchor” of global investment markets, and renminbi-denominated assets are emerging as a new “safe haven.”

Daily Economic News reported that over the past month, not only have China’s government bond yields remained stable, but the renminbi has strengthened against the trend. In the foreign exchange market, the renminbi has also demonstrated strong resilience. In the one-month period ended April 3, the U.S. Dollar Index strengthened in phases, while currencies of developed economies—including the euro, the Canadian dollar, the Swiss franc, the Japanese yen, and the South Korean won—faced broad pressure. The renminbi was the only major currency that appreciated versus the U.S. dollar; as of 7:00 p.m. on April 3, it was 1 U.S. dollar to 6.8842 renminbi.

The report introduced that data from the website of the Cross-Border Interbank Payment System Co., Ltd. show that in March this year, the Cross-Border Interbank Payment System (CIPS) handled a transaction value that hit a peak over the past 12 months. The average daily transaction scale was RMB 920.5 billion, with 35,740 transaction entries, representing a significant increase from RMB 619.7 billion and 25,930 entries in February. On April 2 alone, the transaction value further rose to RMB 1.22 trillion, and the number of transaction entries also reached nearly 42,000.

According to a report by Caixin, the allocation value of renminbi bonds has accelerated in its prominence as global capital arrangements are reshaped. On March 31, the International Capital Market Association (ICMA) successfully held its 2026 China Debt Capital Markets Annual Meeting. At the meeting, multiple heavyweight guests said that as the global economy is undergoing profound adjustments and external uncertainties are rising step by step, renminbi bond yields are stable, credit quality is high, volatility is lower and the correlation with traditional markets is relatively small—making renminbi bonds a must-have option for global asset allocation.

Recently, Deutsche Bank successfully priced and issued RMB 5.5 billion multi-tenor panda bonds in China’s interbank bond market. This issuance is the first panda bond issued in 2026 by European financial institutions, and it also sets a new record for the largest single panda bond issuance by a foreign bank.

In an interview with a reporter from Shanghai Securities News, Zhu Tong, general manager for Deutsche Bank China, said that in global market volatility, the renminbi bond market has shown good stability. Although external geopolitical risk rose during the issuance period, the market generally believed that the renminbi bond market was affected relatively limitedly, the issuance proceeded as planned, and it received positive subscription from investors.

Renminbi-denominated assets have clearly become a new “safe haven” amid the Middle East crisis, and this phenomenon has also drawn attention from multiple institutions. Bryan Pascoe, Chief Executive Officer of the International Capital Market Association, said that within the entire international debt capital market, China is a very important market and plays an important role in global capital flows and market development. Currently, China’s share in the global debt market is still relatively low, and the potential for improvement is substantial in the future.

Zhao Junjie, Chief Executive Officer of Baillie Gifford Asset Management Asia (excluding Japan) and equity partner of the Baillie Gifford Group, recently said in an interview with Xinhua Finance and Economics that, “In a global environment of high inflation, China can maintain a relatively low inflation level. Against the backdrop of market volatility, it ensures the relative stability of its bond yields. Combined with the steady progress of renminbi internationalization and the macro environment that benefits emerging-market currencies as the U.S. dollar weakens, we take a long-term optimistic view of the renminbi bond market.”

Goldman Sachs released a research report saying that under the current Middle East conflict shock, China’s situation is stronger than that of most economies. China’s overall dependence on imported energy is much lower: more than half of total energy consumption comes from coal, and coal is almost entirely produced domestically in China. In addition, China’s high level of oil inventories and measures that limit the transmission of domestic fuel prices also reduce China’s sensitivity to oil prices.

The East Securities Macro and Strategic Research team noted recently that in recent years, global international relations and domestic policy measures have become the main variables affecting macro conditions and asset pricing. In the context of increasing uncertainty in the external environment, China’s development advantages and development path are clearer, which will further support a reassessment of the value of China’s assets.

The team believes that while the international political environment will remain complex in the future, there will be more factors favorable to China. The development of China’s economy, society, industries, and technological strength will make China become the real “anchor” in the global investment market. Combined with the prominent stability, continuity, pragmatic targeting, and forward-looking planning of policies, this will fundamentally support the unique value of China’s assets and China’s stock market.

(Source: JieMian News)