World’s Best Performing Bonds Woo Record Foreign Buyers to China
- Foreigners added 50 billion yuan of sovereign notes last month
- Inflows came amid bets Beijing will keep monetary policy loose
Global funds accelerated the purchases of Chinese government debt, the best-performing bonds in the world this year, as expectations of policy easing put China ahead of other nations that are moving toward withdrawing the stimulus deployed in the pandemic era.
Foreigners added 50 billion yuan ($7.7 billion) of the nation’s sovereign debt in July, increasing their holdings to a record 2.18 trillion yuan, data from ChinaBond show. The purchase was nearly four times that of June, reversing a two-month slowdown.
The world’s first major economy that emerged from the pandemic is showing more signs of slowing down, boosting the appeal of its debt. The bond rally started after China policy makers surprised investors last month with the first cut in reserve requirement ratio in more than a year. It gathered pace in recent weeks as a worsening coronavirus outbreak in parts of the country and an equity selloff sparked by regulatory crackdown in several industries bolstered expectations for more policy easing.