China debt: foreign holdings of government bonds rise above 2 trillion yuan in February amid global rout

Total holdings of Chinese government bonds by investors outside mainland China stood at a record 2.06 trillion yuan (US$318 billion) at the end of February

Foreign holdings of quasi-sovereign policy bank bonds also rose 3.1 per cent, to 986.97 billion yuan.

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Chinese government bonds were not immune to selling that hit global bond markets in late February as rising expectations of economic growth and fears of a possible spike in inflation made investors retreat, but avoided the worst of the rout. Photo: Reuters

Published: 4:17pm, 3 Mar 2021Updated: 4:17pm, 3 Mar 2021

Foreign investors held more than 2 trillion yuan (US$309 billion) worth of Chinese government bonds for the first time in February, data showed on Wednesday, even as premiums over US debt shrank as a bond sell-off dented global markets.

Total holdings of Chinese government bonds by investors outside mainland China stood at a record 2.06 trillion yuan (US$318 billion) at the end of February, according to data published on Wednesday by interbank bond market clearing house China Central Depository & Clearing Corporation.

That was a 3.1 per cent rise over the previous month, the slowest rate of growth since June, but contrasted with a slight contraction in Chinese government bonds holdings by domestic entities, according to Reuters calculations using the data.

Foreign holdings of quasi-sovereign policy bank bonds also rose 3.1 per cent, to 986.97 billion yuan.

Additional monthly interbank bond market data from the Shanghai Clearing House was not available by Wednesday afternoon.

Chinese government bonds were not immune to selling that hit global bond markets in late February as rising expectations of economic growth and fears of a possible spike in inflation made investors retreat, but avoided the worst of the rout.