new opportunities for foreign investment in china's bond market
the 2023 china balance of payments report reveals a notable shift in foreign investment trends, with a net inflow of us$14.1 billion into china's securities, marking a turnaround from the net outflow observed in 2022. this surge is primarily attributed to heightened foreign capital allocation toward rmb-denominated bonds, fostering a gradual stabilization in foreign investment within china's securities domain. amidst evolving international and domestic macroeconomic policies, alongside trends in economic operations, the ongoing promotion of rmb internationalization, the stable foundation of the rmb exchange rate, and the burgeoning bond market, the allure of china's bond market for international investors is on a steady ascent. foreign investors are increasingly directing their capital toward rmb-denominated bonds, particularly government bonds, heralding a trajectory of rapid growth and solidifying their role as the primary avenue for foreign investment in china's securities.
expanding opening-up paves the way for foreign investor participation
to facilitate foreign investor entry, china has progressively introduced policies opening its bond market since 2005, effectively propelling its continual liberalization. the evolution of china's bond market opening-up can be delineated into three key stages.
