Participants attend a ceremony held by Hong Kong Exchanges and Clearing Limited to launch the "northbound" mainland-Hong Kong bond connect in Hong Kong, south China, July 3, 2017. (Xinhua/Wang Shen)
BEIJING, June 6 (Xinhua) -- Recent fluctuations in cross-border securities investment into China are not expected to change the long-term trend for overseas investors to add holdings of Renminbi (RMB)-denominated assets, reported Xinhua Finance quoting Wang Chunying, spokesperson and deputy head with the State Administration of Foreign Exchange (SAFE) on June 2.
Wang made the remarks on a news briefing convened by the Chinese central bank late in last week to arrange financial policies to further foster the economy, saying that RMB-denominated assets remain relatively attractive to overseas investors in multiple aspects in light of their steady returns, relatively independent market trend and being a good choice for portfolio investment.
Recent years, foreign central banks and funds tracking international indexes allocated much more funds to invest in RMB-denominated assets and the higher weighing of RMB in the special drawing rights (SDR) currency basket of the International Monetary Fund (IMF) also reflected the stronger confidence of international community in the Chinese economy and financial market development.
In future, there is still large space for overseas investors to further add RMB-denominated asset holdings given not only the 2.79 percent share of RMB in global currency reserves but also their 3-5 percent of holdings on China's stock and bond markets, noted Wang.
What's more, the recent fluctuations in cross-border securities investment into China did not change the generally stable cross-border capital flows for China either, according to Wang.
This year, cross-border capital flows have remained generally stable for China and under influences of multiple factors at home and abroad, cross-border capital flows tended to basically balance from the inflows at more times in the previous period.
In future, conditions for the cross-border capital flows to maintain a relative balance and the general stability do exist, said Wang.
For one thing, surpluses under the current account and in direct investment are likely to continue to stabilize the fundamental of cross-border capital flows.
For China, reasonable current account surpluses are expected to continue alongside the gradual ebbing of short-term shocks from the epidemic and thanks to the sustained mid- and long-term advantages in industrial and supply chains and relatively strong export growth vitality due to enhanced market diversification and development of new trade modes.
The high-level rate of returns for overseas investors to invest in China is also likely to continuously attract inbound investment given the foreseeable high-quality development of Chinese economy in the mid and long term and the giant domestic consumption market.
For another, China's external debts grew reasonably with structural optimization and are anticipated to maintain steady in the future.
By the end of 2021, China's total external debts accounted for about 15 percent of the gross domestic product (GDP) and related indicators such as the debt ratio and debt service ratio all stayed within international safety lines, hinting no excessive accumulation and growths in line with development of the real economy. (Edited by Duan Jing with Xinhua Silk Road, duanjing@xinhua.org)
A single purchase
