Local bonds becoming more attractive to foreign investors

A low interest rate environment has made China's local bond market attractive to global investors. But careful scrutiny of individual corporate bonds is also essential, according to a leading global asset manager.

Ricardo Adrogue, head of emerging markets debt at Babson Capital Management, said the weaker growth is not necessarily a bad thing in the eyes of investors, because that could spur further rate cuts, which in turn could spark a rally in local bond sales.

"Should China open its onshore market, it's most likely I would increase exposure to it. But I would be more selective in which corporate names we picked," he said.