Foreign Investors Raise Holdings on China’s Interbank Bond Market by over 1 Trillion Yuan in 2020


The latest data from the Chinese central bank points to a sharp rise in investment by foreign institutional investors on China’s interbank bond market in 2020.

As of the end of December foreign institutions held 3.25 trillion yuan in bonds on the interbank bond market, accounting for 3.2% of the total entrusted interbank bond market volume, according to figures from the People’s Bank of China (PBOC).

PBOC data further indicates that the net increase in foreign institutional holdings of Chinese interbank market bonds exceeded 1 trillion yuan in 2020, given that as of the end of 2019 their holdings stood at 2.1876 trillion yuan.

As of the end of December foreign institutional investors held 1.88 trillion yuan in government bonds, comprising 57.7% of their total holdings, and 924.809 billion yuan in policy financial bonds, accounting for a 28.4% share.

Holdings of interbank market bonds by foreign institutions received a big boost from the official northbound opening of China’s Bond Connect scheme in July 2017, breaching one trillion yuan in the same year.