Chart of the Day: Overseas Buyers Picking Up More Yuan-Denominated Bonds

Offshore holdings of domestic yuan-denominated bonds increased for the 18th straight month in August, hitting 1.41 trillion yuan ($206.27 billion), according to China Central Depository and Clearing Co. Ltd. (CCDC), one of the country’s clearing houses.

Graphic: Gao Baiyu/Caixin

Foreign institutions strengthened their yuan-denominated bonds positions by 58 billion yuan in August from a month earlier, according to Caixin calculations based on CCDC data.

Banking regulators have introduced a raft of measures to lure offshore money to invest in China’s bond market. On Aug. 30, China’s cabinet announced that foreign institutions will be exempt for the next three years from paying corporate income tax and value-added tax on interest from Chinese bonds.

Last year, regulators instituted a bond connect program that allows eligible investors to trade and settle mainland bonds through a Hong Kong-based custodian and clearing service.

Contact reporter Charlotte Yang (yutingyang@caixin.com)