Although Vietnam has two stockmarkets and a domesticbondmarket, its companies are still too reliant on a ramshackle state banking sector another parallel with China.
Beijing also has opened the door wider for foreign investors to access the domesticbondmarket, though Chinese banks and mutual funds still make up the biggest chunk of buyers.
The market now expects domestic Japanese Government Bond (JGB) holders to cash out and seek higher yield solace in U.S. Treasuries and other high-grade foreign bonds.
Even if its net debt were zero, a government could still foster a liquid bondmarket by continuing to issue bonds and investing the proceeds in domestic or foreign private-sector assets.