Foreign Institutional Investors on China’s Interbank Bond Market More than Double in 2019

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The latest data from the Chinese central bank points to a sharp increase in the number foreign institutional investors participating in China’s interbank bond market.

Figures released by the People’s Bank of China (PBOC) on 19 January indicate that a total of 45.3 trillion yuan in bonds were issued on the Chinese market in 2019, for an increase of 3.1% compared to the previous year.

This included:

  • 4.0 trillion yuan in sovereign bonds,
  • 4.4 trillion yuan in local government bonds,
  • 6.9 trillion yuan in financial bonds,
  • 18.0 trillion yuan in interbank certificates of deposit,
  • 9.7 trillion yuan in corporate credit bonds.

As of December 2019 the interbank money market monthly weighted average interest rate was 2.09%, for a YoY decline of 48 basis points, while the monthly weighted average interest rate for pledged repos was 2.10%, for a YoY decline of 58 basis points.

As of the end of 2019 the interbank bond market was host to a total of 25,888 participants, for an increase of 5125 institutions compared to the end of last year.

This included 2610 offshore institutional investors, for an increase of 1424 compared to the previous year.

Depository financial institutions held 57.4% of the debt on the interbank market, keeping steady with levels at the end of last year, while non-legal person institutional investors held 29.6% of debt, for an increase of 0.4 percentage points.

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