Five-year credit-default swaps (CDS) on China’s bonds have become almost as safe as US Treasuries, Bloomberg reported. Swap contracts have fallen 29% over the last month to 56 basis points, below that of France and the UK. Default swaps on US sovereign debt have remained steady at 46 basis points. The 10-point spread between China and the US is the narrowest since January 2008. Last week, credit ratings agency Moody’s (MCO.NYSE) said that it may raise China’s rating up from its current A1 level. China’s low CDS rates reflect its massive foreign exchange reserves and a debt-to-GDP ratio of just 22%, compared with 82% in the UK, 85% in France and 94% in the US. However, many analysts also believe China’s high property prices, local government debt and questions over its currency will continue to discount China’s debt relative to that of the US.