(Yicai Global) July 9 -- Overseas institutions increased their holdings of Chinese government bonds over seven straight months as of last month, statistics from the sector show.

This rise has boosted the scale of China's debt instruments to a record CNY1.64 trillion (USD238 billion), Securities Daily reported today.

This demonstrates that the enthusiasm abroad for infusing funds into China bonds shows no sign of abating and will continue to swell the market's scale.

Foreign investment institutions added CNY34.62 billion (USD5 billion) to their net China debt holdings last month alone, show statistics from Beijing-based China Securities Depository and Clearing, a company which the Shanghai and Shenzhen exchanges jointly own.

These purchases of ever more Chinese treasuries stem mainly from market-oriented decision-making after comprehensive judgment based on the bonds' fluidity, stability profits and transactional efficiency after the opening-up of the financial sector, said Liu Zhe, vice president of Beijing-based economics thinktank Wanb Institute.

The interest-rate spread is also one of the factors influencing the direction of foreign investment, in addition to the continuous expansion of overseas investors' channels for entry into the Chinese bond market that is luring funds from other lands to flood in, other analysts also said. The interest-rate spread between Chinese and overseas bonds has clearly widened since the start of this year and cast the former's price-performance ratio into prominence.

The rate of return for China's 10-year national bonds reached 3.15 percent on July 4, declining 36.28 basis points from the same period last year, and it has held to this downward trend, according to the latest data from China Central Depository and Clearing.

The rate for 10-year bonds is about 2.0 percent in the US Treasury Bond market, the lowest level since November 2016.

Chinese bonds' allure for overseas investors thus seems set to only grow along with their holdings of them.

Editor: Ben Armour