China News Agency, Beijing, April 23 (Reporter Xia Bin) Wang Chunying, deputy director and spokesperson of the State Administration of Foreign Exchange of China, said at a press conference in Beijing on the 23rd that according to statistics, in the first quarter foreign investment net increased holdings of Chinese domestic bonds by 63.3 billion The US dollar increased by 11% month-on-month. In March, foreign investment in bond holdings increased by US$3.3 billion, a decrease from the historical highs in January and February, but an increase over the same period in 2019 and 2020.
"At present, the overall trend of increasing foreign holdings will continue." Wang Chunying said that making such a judgment is mainly due to the four characteristics of the Chinese bond market.
First, the fundamentals provide fundamental support for foreign investors to increase their holdings of domestic bonds.
Wang Chunying said that since the accelerated opening of China's bond market in 2016, foreign investors' related investment in China's domestic bond market has maintained an average annual double-digit growth, reflecting the long-term and stability of foreign investment in increasing domestic bond holdings.
The overall situation of China's economic and social development has remained stable, and major macroeconomic indicators continue to show positive changes. This is a solid foundation for foreign capital inflows.
Second, the Chinese bond market itself has room for the development of increased foreign capital allocation.
Wang Chunying said that by the end of last year, foreign holdings of domestic bonds accounted for 3% of the total bond market custody, which was lower than 28% in the United States, 14% in Japan, and lower than emerging market countries such as Brazil (9%).
In the future, the bond market will continue to open to the outside world, and international acceptance and compatibility will continue to increase. There is still room for a substantial increase in the proportion of foreign capital.
Third, the asset yield of Chinese bonds has a comparative advantage.
Wang Chunying pointed out that in the current global negative interest rate environment, the relatively high yield of RMB bonds provides foreign investors with very good returns and diversified investment portfolio options.
In addition, RMB bond investors are mainly foreign central banks and sovereign funds, with a stable style, and pursuing the long-term allocation value of RMB assets. This is another reason why the bond market can maintain its attractiveness to foreign capital.
Fourth, renminbi assets present a certain degree of safe-haven asset attributes.
"From the actual performance, when the external environment fluctuates greatly, the performance of RMB assets is very good." Wang Chunying said.
She emphasized that, on the whole, the phased changes and adjustments in the current external environment will not change the overall development of China's bond market opening to the outside world, nor will it change the long-term willingness of foreign investors to invest in Chinese bonds.
(Finish)