Chinese local currency government bonds are entering JP Morgan’s EM local bond index, the GBI-EM GD, at the end of this month. The real value to investors of including China in a portfolio of local bonds lies in the fact that Chinese bonds tend to perform far better than other EM local currency bonds during bouts of risk aversion and/or EM bear markets. The strong outperformance of Chinese bonds during bouts of risk aversion this year and over the past decade strongly support their credentials as ‘safe haven’ assets within EM local bond markets