Beijing is stepping up efforts to attract foreigners to its sovereign debt by building out futures contracts and other bond market infrastructure, but some investors warn that China’s economic challenges could deter them from committing to long‑term allocations. In June the People’s Bank of China launched a renminbi repo facility for foreign central banks, while the Hong Kong Stock Exchange this week rolled out Chinese government bond futures. At the same time LCH, one of Europe’s largest clearing houses, has started to accept offshore renminbi‑denominated CGBs as collateral.

In April China granted access to its onshore bond futures to qualified foreign investors. “In general, [Chinese authorities] are listening,” said Stephen Chang, a portfolio manager at Pimco. Terrence Pang, a portfolio manager at Fidelity, added that the CGB futures market will be extremely useful as it matures. However, many investors say decisions to buy CGBs hinge not on market access but on the slowing pace of China’s long‑term growth and a rising debt‑to‑GDP ratio. “In terms of market access, we already have all the opportunities on that front,” said Leonard Kwan of T Rowe Price, noting that a repivot toward faster growth would help.

With about Rmb44tn ($6.5tn) of CGBs outstanding, China’s bond market is one of the world’s largest debt pools, yet foreign ownership remains low. Data from China Bond Connect shows foreign holdings have dropped from a peak of about Rmb4.5tn in 2024 to about Rmb3.2tn today. “Liquidity and the development of the local derivatives market haven’t been the swing factor for us,” said Fraser Lundie of Aviva Investors. Nevertheless, Chinese government bonds have outperformed other sovereign debt as haven assets during recent market stress, offering low correlation and stable yields.