Foreign institutions maintain net purchases of China's assets for 3 consecutive years

BEIJING, Jan. 13 (Xinhua) -- Foreign institutional investors have maintained their net buying of China bonds and stocks for three years in a row by the end of 2020, reported Securities Daily Wednesday.

Statistics with China Central Depository & Clearing Co., Ltd. (CCDC) and Shanghai Clearing House (SHCH), two central securities depositories in China, showed that foreign institutions held in total 3.04 trillion yuan of bonds, excluding interbank certificates of deposit (CDs), on China's interbank bond market by the end of 2020, 1.07 trillion yuan more than the comparable data at the end of 2019.

Since 2016, bond holdings of foreign institutional buyers on China's interbank bond market have increased for five consecutive years.

CCDC and SHCH data showed that their bond holdings on the interbank bond market stood at 797.593 billion yuan, 1 trillion yuan, 1.55 trillion yuan, 1.97 trillion yuan and 3.04 trillion yuan from 2016 to 2020, up 21.12 percent, 20.79 percent, 34.94 percent, 21.47 percent and 54.05 percent respectively.

They possessed, by the end of November 2020, tradable A-shares with aggregate market value of nearly 3 trillion yuan, accounting for about 4.8 percent of the market value of all outstanding tradable A-shares, according to public data.

Xie Yaxuan, chief macro analyst with China Merchants Securities attributed the explicitly accelerating foreign investment inflows into China's bond and stock markets to the capital market opening-up policies, gradually improved policy facilitation, supports and loosening for foreign access into the China capital market and acknowledgement by foreign investors.

Reflected on China bond and stock assets tracked by international benchmark indexes, and more and more international institutions and long-term investors decided to add holdings of China's assets, the importance of China's assets in global market is picking up, noted Xie.

Tian Lihui, dean of Nankai University Institute of Finance and Development told that foreign investors in possession of about 6 trillion yuan of tradable A-shares and domestic bonds revealed the substantial attractiveness of Renminbi-denominated assets to them. (Edited by Duan Jing with Xinhua Silk Road, duanjing@xinhua.org)