Foreign investors, especially central banks, have continued to expand their holdings of Chinese bonds in 2020, given the rosy outlook of the world's second-largest economy, the State Administration of Foreign Exchange (SAFE) said on Friday.

 

By the end of last year, outstanding bonds held by foreign investors reached 512.2 billion U.S. dollars, with central banks owning 263.7 billion dollars.

 

In recent years, with the continuous advancement of renminbi internationalization, the Chinese currency has enhanced its attribute as a global reserve currency, and overseas central banks have taken the lead in increasing bond holdings issued in China, said SAFE spokesperson Wang Chunying.

 

"China's medium and long-term economic development prospects remain sound, which is the main reason why foreign investors favor the country's bond market," Wang said, noting that China's economic fundamentals have taken the global lead in recovery amid the COVID-19 pandemic.

 

The yield of China's bonds is competitive among those issued by major countries, and renminbi assets have demonstrated certain traits of safe-haven assets, Wang added. "These are the main factors that attract foreign capital to China's bond market." Enditem