Photo taken on Nov. 3, 2020 shows the view of the Lujiazui area of Pudong, east China's Shanghai. (Xinhua/Ding Ting)
BEIJING, Aug. 5 (Xinhua) -- China's stock and bond markets saw a total foreign capital inflow of about 1.848 billion U.S. dollars in July despite the sharp decreases of capital inflows into the emerging markets globally, data from the Institute of International Finance showed on Tuesday.
Foreign capital inflow to China's stock market hit 889 million U.S. dollars last month and debt instruments attracted 959 million U.S. dollars of foreign investment, according to the IIF.
At the end of July, the total amount of RMB bonds owned by overseas institutions under the depository of the China Central Depository & Clearing Co. (CCDC)amounted to over 3.375trillion yuan (about 552.1 billion U.S. dollars), an increase of 75.352 billion yuan from previous month, marking the largest growth in the past five months, the CCDC said on its website.
Besides, in the first half of 2021, overseas institutional investors have increased holding of RMB bonds by 488.9 billion yuan, up over 50 percent on a yearly basis, data from CCDC and Shanghai Clearing House.
China remains a strong magnet for global investors considering the stable inflows of foreign capital and the minimal impacts of market cycles on China's bonds market, said Wu Ziyu with Aberdeen Standard Investment.
As of the first half of this year, the volatility of interest rate and bond yields has been the lowest level since March 2018 and demands for bonds remained stable.
By the end of June, foreign investors had been the second largest investment source in China's treasury bond market.
While high yields are a major consideration for investment, the inclusion of Chinese bonds in investment portfolios will help investors diversify risks, said Wu.
China will further open up to foreign investors as Chinese government bonds will be included in the FTSE World Government Bond Index, starting from October 2021, and thus international investors are increasing their holdings.
By the end of 2021, foreign holdings of China's treasury bonds is expected to take a share of 10 percent from the current 8 percent, and the foreign capital inflow will likely hit 1.2 trillion yuan in 2021, estimated by Joe Perry, senior analyst of GAIN Capital.
(Edited by Li Shimeng with Xinhua Silk Road, lishimeng@xinhua.org)
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