Foreign holdings of Chinese bonds see net increase of 80 bln USD in first 3 quarters: data

BEIJING, Oct. 25 (Xinhua) — Foreign holdings of Chinese domestic bonds saw a net increase of 80 billion U.S. dollars in the first three quarters of 2024 amid global investors’ growing interest in renminbi assets, China’s State Administration of Foreign Exchange data shows.
In terms of scale, up till now, foreign holdings of domestic renminbi bonds have exceeded 640 billion U.S. dollars, reaching a historic high, according to the data.
Foreign central banks and commercial banks are the biggest investors in domestic renminbi bonds, as they allocate a higher proportion of investment in medium and long-term bonds such as treasury bonds and policy bank bonds, according to the foreign exchange regulator.
The growing foreign holdings have reflected global investors’ confidence in the Chinese market. At present, 24 global systemically important banks have a presence in China.
Analysts say that China’s continuously improving economic structure has helped drive foreign investment increases. In the first three quarters, the added value of the equipment manufacturing industry increased by 7.5 percent year-on-year, and the added value of the high-tech manufacturing industry increased by 9.1 percent year-on-year.
Official data also showed that in the first eight months of this year, nearly 37,000 new foreign-funded firms were established in China, up 11.5 percent year on year, as foreign direct investment in actual use during the same period remained at a high level.
Alan Ho, co-senior country officer for China at J.P. Morgan, said that the pace of China’s financial market opening up had accelerated in recent years. For example, foreign ownership restrictions in local securities, funds and futures companies have been lifted and financial markets’ connectivity mechanisms have been maturing more quickly than expected, which has brought broader development opportunities to foreign financial institutions. ■