Saudi Press

Saudi Arabia and the world
Wednesday, Sep 03, 2025

0:00
0:00

China Opens Exchange Bond Markets to Overseas Investors

China will allow foreign institutional investors to trade bonds on its smaller exchange market in its latest step to attract more capital inflows by opening its financial markets, after a record selloff of Chinese holdings by foreign investors. The move designed to support financial inflows after selloff.
Qualified foreign institutional investors, which can include central banks, sovereign funds, commercial banks and pension funds, will be allowed to invest in bonds on the exchange market, the People’s Bank of China (PBOC) said in a statement published on its website. The move would “help expand capital inflows to China,” it added.

Financial institutions can trade bonds and invest in derivatives as well as other instruments allowed by the central bank and China Securities Regulatory Commission, starting June 30, as China seeks to widen international participation in its 138.2 trillion yuan ($20.6 trillion) bond market, according to the PBOC statement.

In a separate move that could also boost financial flows to China, the CSRC, the country’s top securities regulator, and Hong Kong’s Securities and Futures Commission agreed in principal to include exchange-traded funds in a program connecting stock markets in the Chinese mainland and Hong Kong, the regulators announced in a joint statement. Preparation work would take two months, it added.

Global funds sold record amounts of Chinese sovereign debt in February and March as their yield premium over Treasuries collapsed and money managers fretted about a supply surge. Foreign investors have been alarmed by Beijing’s close ties with Moscow following tough sanctions on Russia over invasion of Ukraine, and China’s strict zero-Covid policy which has led to widespread lockdowns since March.

Concerns about China’s economy, which contracted in April, have weakened China’s currency. The offshore yuan fell 1.5% against the dollar last week, its biggest weekly drop since 2020. It has strengthened slightly since on news of lockdown easing in Shanghai.

Chinese bonds are traded in two markets in China. Foreign investors have been allowed since 2016 to invest in the country’s interbank bond market, which accounts for 86% of the China’s total domestic bonds, while the remainder is traded in the exchange market, according to a report last year by the International Capital Market Association and China’s Association of Financial Market Institutional Investors.

Data from Chinabond released earlier this month showed foreign investors offloaded 42 billion yuan of Chinese government bonds in April. While the outflows narrowed from March, it marked a third straight month of selling by overseas funds. That was the longest string of monthly selloffs since 2015.

The exchange market features some kind of assets such as enterprise asset-backed securities which aren’t traded on the interbank market, the report added. China’s securities regulator plays the major role in regulating the exchange market, while the interbank market is mainly regulated by the PBOC.

Chinese Premier Li Keqiang’s plea this week for officials to move decisively to prevent the economy from backsliding and the nation’s grim economic data highlight the risks the world’s second-largest economy is facing amid stringent covid lockdowns, a property credit crisis and waning exports.
Newsletter

Related Articles

Saudi Press
0:00
0:00
Close
Information Warfare in the Age of AI: How Language Models Become Targets and Tools
Israeli Airstrike in Yemen Kills Houthi Prime Minister
After the Shock of Defeat, Iranians Yearn for Change
YouTube Altered Content by Artificial Intelligence – Without Permission
Iran Faces Escalating Water Crisis as Protests Spread
More Than Half a Million Evacuated as Typhoon Kajiki Heads for Vietnam
HSBC Switzerland Ends Relationships with Over 1,000 Clients from Saudi Arabia, Lebanon, Qatar, and Egypt
Sharia Law Made Legally Binding in Austria Despite Warnings Over 'Incompatible' Values
Dogfights in the Skies: Airbus on Track to Overtake Boeing and Claim Aviation Supremacy
Tim Cook Promises an AI Revolution at Apple: "One of the Most Significant Technologies of Our Generation"
Are AI Data Centres the Infrastructure of the Future or the Next Crisis?
Miles Worth Billions: How Airlines Generate Huge Profits
Zelenskyy Returns to White House Flanked by European Allies as Trump Pressures Land-Swap Deal with Putin
Beijing is moving into gold and other assets, diversifying away from the dollar
Cristiano Ronaldo Makes Surprise Stop at New Hong Kong Museum
Zelenskyy to Visit Washington after Trump–Putin Summit Yields No Agreement
High-Stakes Trump-Putin Summit on Ukraine Underway in Alaska
Iranian Protection Offers Chinese Vehicle Shipments a Cost Advantage over Japanese and Korean Makers
Saudi Arabia accelerates renewables to curb domestic oil use
Cristiano Ronaldo and Georgina Rodríguez announce engagement
Asia-Pacific dominates world’s busiest flight routes, with South Korea’s Jeju–Seoul corridor leading global rankings
Private Welsh island with 19th-century fort listed for sale at over £3 million
Sam Altman challenges Elon Musk with plans for Neuralink rival
Australia to Recognize the State of Palestine at UN Assembly
The Collapse of the Programmer Dream: AI Experts Now the Real High-Earners
Armenia and Azerbaijan to Sign US-Brokered Framework Agreement for Nakhchivan Corridor
British Labour Government Utilizes Counter-Terrorism Tools for Social Media Monitoring Against Legitimate Critics
WhatsApp Deletes 6.8 Million Scam Accounts Amid Rising Global Fraud
Nine people have been hospitalized and dozens of salmonella cases have been reported after an outbreak of infections linked to certain brands of pistachios and pistachio-containing products, according to the Public Health Agency of Canada
Texas Residents Face Water Restrictions While AI Data Centers Consume Millions of Gallons
Tariffs, AI, and the Shifting U.S. Macro Landscape: Navigating a New Economic Regime
India Rejects U.S. Tariff Threat, Defends Russian Oil Purchases
United States Establishes Strategic Bitcoin Reserve and Digital Asset Stockpile
Thousands of Private ChatGPT Conversations Accidentally Indexed by Google
China Tightens Mineral Controls, Curtailing Critical Inputs for Western Defence Contractors
OpenAI’s Bold Bet: Teaching AI to Think, Not Just Chat
BP’s Largest Oil and Gas Find in 25 Years Uncovered Offshore Brazil
JPMorgan and Coinbase Unveil Partnership to Let Chase Cardholders Buy Crypto Directly
British Tourist Dies Following Hair Transplant in Turkey, Police Investigate
WhatsApp Users Targeted in New Scam Involving Account Takeovers
Trump Deploys Nuclear Submarines After Threats from Former Russian President Medvedev
Germany’s Economic Breakdown and the Return of Militarization: From Industrial Collapse to a New Offensive Strategy
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
President Trump Diagnosed with Chronic Venous Insufficiency After Leg Swelling
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
"Can You Hit Moscow?" Trump Asked Zelensky To Make Putin "Feel The Pain"
×