Global holdings of Chinese stocks and bonds have increased by around $120 billion in 2021 as international investors look for returns in the country’s markets despite recent regulatory crackdowns by Beijing, reports the Financial Times. International investors held RMB 7.5 trillion ($1.1 trillion) of equity and fixed income securities priced in Chinese yuan as of the end of September, up about RMB 760 billion from the end of 2020.
The climb highlights how investors are reaching into mainland Chinese markets directly, rather than through financial instruments listed in global financial hubs such as New York and Hong Kong. It comes at a time when some analysts and investors worry that strong returns in developed markets may be exhausted, leading them to pursue opportunities elsewhere.
China’s offshore listings have had a tumultuous year, with a succession of regulatory crackdowns knocking investor confidence in sectors ranging from technology to education. A liquidity crisis at property developer Evergrande, meanwhile, has prompted a round of heavy selling for internationally traded, high-yield dollar bonds from Chinese issuers.