(Yicai) Dec. 6 -- International investors have been buyers of Chinese yuan-denominated bonds for nine straight months this year, with a cumulative net purchase of nearly CNY1 trillion (USD139.7 billion), as the country’s rebounding economy proves to be a strong draw for foreign capital, according to the latest data.

Yuan bonds have become more attractive as a safe haven for foreign capital since the third quarter, after a number of policies started to take effect. Foreign investors raised their holdings by CNY40 billion to reach (USD27.9 billion) in October and they are expected to hike their holdings by CNY250 billion in November, according to the central bank.

Foreign institutions held CNY3.3 trillion (USD462.9 billion) of Chinese bonds as of the end of October, triple the amount at the end of 2017, according to central bank data. Some 1,110 overseas entities have invested in China’s bond market. On average around 100 new foreign institutions from over 70 countries and regions, including the US, the UK, France, Germany, Japan and Singapore, have entered the market every year since 2017.

All kinds of foreign investors are actively participating in China’s bond market. Medium and long-term investors, such as sovereign banks, hold 70 percent of the bonds, and about 90 of the world’s top 100 asset management institutions are active in China’s bond market.

Bloomberg Barclays, JP Morgan Chase and FTSE Russell have been including Chinese bonds into the three major international bond indexes since 2019, introducing hundreds of billions of dollars of index-tracking funds to China’s bond market.

Chinese bonds have the largest weighting of any country in the Government Bond Index-Emerging Markets. The weightings of Chinese bonds in the Bloomberg Barclays Global Aggregate Index and FTSE World Government Bond Index have exceeded expectations. This reflects the confidence of global investors in China’s long-term economic growth, in the continuous opening up of its capital markets and in yuan-denominated assets.

Editors: Shi Yi, Kim Taylor