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Foreign Investors Snap Up Most China Policy Bank Notes on Record

  • Notes preferred over government bonds for returns, liquidity
  • Broader availability of investment channels seen as factor
Chinese Yuan, Hong Kong Dollar and U.S. Dollar Banknotes
Photographer: Paul Yeung/Bloomberg
Updated on

Foreign investors piled into China’s policy bank notes at a record pace last month as efforts to open up Chinese markets into the global financial system help buoy inflows.

They bought a net 50.7 billion yuan ($7.3 billion) of the notes in May, a month that saw foreign holdings of Chinese bonds rise the most this year. That’s according to ChinaBond data going back to July 2014, which covers about 83% of the holdings. The Shanghai Clearing House typically publishes the remaining data by the 10th day of any given month.