Although its output is 60 percent of that of the US (at market exchange rates), imports of non-oil commodities are around 2½ times those of the US. Market forecasts suggest that China’s economic growth is currently in the 5 to 7 percent range and supported by strong services sector production, whereas growth in activity in the manufacturing and construction sectors has slowed substantially.
A second hypothesis involves the behavior of pension funds. As the inevitable increases in retirement populations approach, especially among developed countries, the underfunding of retirement plans has become a growing concern. Pension funds and insurance companies, are being pressed to make significant additions to longer-term bond portfolios.