...China and other developing nations are accumulating wealth, but failing to create sophisticated local markets that feature their own risk-free instruments. That’s left a dangerous reliance on U.S. Treasuries, according to Jen’s argument, perpetuating a bond bubble and pushing investors into riskier assets.
...Absent of a massively large and liquid sovereign bond market which can act as free-risk collateral and benchmark for other instruments, no currency can ever become an international currency,”
https://www.bloomberg.com/news/articles/2017-06-13/synchronous-global-recovery-masks-a-deepening-asset-imbalance
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