China's bond market sees net purchases from overseas investors
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E-mail Xinhua, July 5, 2023
Overseas institutions have continued to make net purchases of Chinese bonds in China's inter-bank bond market despite the global trend of interest rate hikes in the United States and major European economies.
According to the China Foreign Exchange Trade System, the net buying of Chinese bonds by overseas institutions in the secondary market exceeded 120 billion yuan (about 16.7 billion U.S. dollars) in June.
This was expected to be the second consecutive month that overseas institutional investors have increased their holdings of Chinese bonds, the agency said.
So far, more than 1,100 overseas institutions from over 60 countries and regions have entered the Chinese inter-bank bond market, it said.
Despite the relatively low coupon rates of Chinese bonds, investment in the Chinese bond market is still of great importance to foreign institutions in their global asset portfolio allocation, the China Foreign Exchange Trade System (CFETS) said.
Compared with global asset portfolios or purely emerging market portfolios, Chinese bonds provide better risk diversification, while those sought after by overseas institutional investors enjoy good liquidity as the trading mechanism and services improve.
The CFETS added that it will continue to make further product and service innovations, and will improve the infrastructure and investment environment, to advance the high-level opening-up of the country's inter-bank bond market.
