China government bonds close higher as the sharp decline in local equity markets lead funds to seek out the safe-haven debt market, says a Shenzhen-based trader with a local brokerage. Also, there are rising expectations that China will introduce more easing measures soon amid the slowing economy and fading inflationary pressure, the trader adds. Xu Lianzhong, a researcher at the pricing-monitoring unit of the NDRC, said in a commentary published in the China Securities Journal Monday that China's CPI is expected to rise no more than 3.4% this year, vs 2011's 5.4% increase. The Shanghai exchange government bond index ends at 133.38 vs 133.29 at Friday's close, and is tipped to keep an upward bias in the near term given sufficient liquidity in the money market.
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