Central Bank of China- Foreign investors hold nearly 4.6 trillion yuan in Chinese bonds

On October 21, during a press conference in Beijing, Deputy Governor of the People’s Bank of China, Lu Lei, announced that China has become the second-largest bond market in the world, with foreign investors holding nearly 4.6 trillion yuan worth of Chinese bonds—marking a historic high.

The announcement came at the opening of the 2024 SWIFT International Banking Operations Conference (Sibos 2024) in Beijing. Lu emphasized that openness and collaboration will continue to be the guiding principles for the development of China’s financial sector. He stated that the People’s Bank of China is committed to enhancing the investment environment for foreign capital and facilitating greater investment opportunities in the Chinese financial markets. Additionally, he highlighted the bank’s support for high-quality Chinese enterprises looking to list and raise funds overseas, as well as its encouragement for Chinese sovereign wealth funds, financial institutions, and other entities to actively pursue foreign investments.

Lu also noted that in recent years, the international functions of the renminbi—such as payment settlements, investments, and reserves—have steadily strengthened, demonstrating early signs of a network effect in its global use. According to SWIFT data, the renminbi ranks as the fourth most widely used payment currency globally and the second in trade financing, holding the third-largest weight in the International Monetary Fund’s Special Drawing Rights currency basket.

Furthermore, he shared that significant progress has been made in China’s cross-border payment connectivity. Currently, payment platforms like UnionPay and NPI have QR code payment systems that reach millions of merchants across more than 70 regions worldwide, with e-wallets from Hong Kong, Macau, and South Korea being usable in China.

Lu concluded by stating that the People’s Bank of China will continue to enhance cooperation with foreign monetary authorities on local currency transactions to reduce foreign exchange costs, mitigate currency risks, and improve the efficiency of capital flows. They aim to support qualified banks from various countries in joining the renminbi cross-border payment system and promote the development of the offshore renminbi market. Moreover, the plan includes ongoing improvements to China’s payment infrastructure, advancing cross-border QR code interoperability and processing collaborations, and supporting the international use of Chinese bank cards and e-wallets to enhance the accessibility and consumer experience in cross-border payments.