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

Ask AI · Why Can Chinese Assets Stay Stable Against the Odds Amid the Middle East Crisis?

Since this year, as the U.S. and Israel have carried out sustained attacks on Iran, rising international geopolitical risks have also put global markets under pressure, with turmoil continuing across stock markets, gold, and bond markets. Against this backdrop, China’s market is becoming the “anchor point” for global investment markets, and RMB-denominated assets are emerging as the new “safe haven.”

In a report by the Daily Economic News, over the past month, not only have China’s government bond yields remained stable, but the RMB has appreciated against the trend. In the foreign exchange market, the RMB has also shown strong resilience. Over the one-month period up to April 3, the U.S. Dollar Index strengthened in phases, while currencies in developed economies such as the euro, Canadian dollar, Swiss franc, Japanese yen, and South Korean won were generally under pressure. The RMB became the only major currency that appreciated against the U.S. dollar; as of 7:00 p.m. on April 3, it was 1 U.S. dollar to 6.8842 RMB.

The report says that data from the website of the Cross-Border Interbank Payment System Co., Ltd. show that in March this year, the RMB Cross-Border Interbank Payment System (CIPS) handled transaction value at a peak level over the past 12 months. Daily average transaction size reached 920.5 billion yuan, with 35.74 thousand transactions, up sharply from 619.7 billion yuan and 25.93 thousand transactions in February. On April 2 alone, transaction value further rose to 1.22 trillion yuan, and the number of transactions also reached nearly 42 thousand.

According to a report by Caixin Securities, the allocation value of RMB bonds has been accelerating in visibility as global capital patterns are reshaped. On March 31, the International Capital Market Association (ICMA) successfully held its 2026 China Debt Capital Markets Annual Conference. At the meeting, multiple heavyweight guests said that as the global economy is undergoing profound adjustments and external uncertainties are gradually rising, RMB bond yields are stable, credit quality is high, volatility is less correlated with traditional markets, and RMB bonds are becoming a must-have option for global asset allocation.

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

Zhu Tong, General Manager of Deutsche Bank China, said in an interview with a reporter from Shanghai Securities News that the RMB bond market has demonstrated good stability amid volatility in global markets. Although external geopolitical risks rose during the issuance period, the market generally believed that the RMB bond market was affected relatively less, the issuance was able to proceed as planned, and it received active subscription from investors.

RMB assets have clearly become the new “safe haven” amid the Middle East crisis, and this phenomenon has attracted attention from multiple institutions. Bryan Pascoe, CEO of the International Capital Market Association, said that China is a very important market across the entire international debt capital markets 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 it has huge potential for growth in the future.

Zhao Junjie, CEO of Swiss asset manager Pictet Asset Management Asia (excluding Japan) and equity partner of the Pictet Group, said in an interview with Xinhua Finance that “in a global environment of high inflation, China is able to maintain a relatively low inflation level, ensuring the relative stability of its bond yields amid market volatility. Combined with the steady progress of RMB internationalization and the macro environment of a weaker U.S. dollar that benefits emerging market currencies, we are, in the long run, bullish on the RMB bond market.”

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

An East Securities macro and strategic research team pointed out that in recent years, global international relations and domestic policy measures have become the main variables affecting macroeconomic 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 although the international political environment will remain complex in the future, factors favorable to China will increase. The development of China’s economy, society, industries, and its scientific and technological strength will make China become the true “anchor point” in the global investment market. Combined with the standout stability, continuity, pragmatic targeted approach, and forward-looking planning of its policies, this will fundamentally support the unique value of China’s assets and China’s stock market.