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China's economic recovery
EconomyChina Economy

China wants you to buy ‘quasi-safe’ yuan bonds as it aims to ‘unleash growth momentum’ in economy

  • To encourage capital inflows, China’s foreign-exchange regulator seeks to reassure investors who have been waiting to see how economic policy will unfold
  • ‘Policy optimisations’ and ‘pro-growth tools’ seen helping coordinate pandemic controls with economic development

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Pan Gongsheng, the director of China’s foreign-exchange regulator, says yuan bonds are among the few sovereign bonds maintaining stable prices. Photo: Simon Song
Frank Tangin Beijing

China’s foreign-exchange regulator is trumpeting the attractiveness of yuan-denominated assets – as well as the country’s economic prospects – in the latest bid to encourage capital inflows and ease overseas concerns.

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The comments come as foreign investors have been trying to get a read on the policy direction of Beijing’s new economic line-up following last month’s 20th party congress. A strong US dollar, China’s restrictive zero-Covid strategy and a property-sector downturn have left the market wondering if the economic headwinds in China will intensify.

“The hedging role of yuan-denominated assets has become more obvious,” Pan Gongsheng, deputy governor of the People’s Bank of China, and also director of the State Administration of Foreign Exchange (SAFE), said on Monday at the annual Financial Street Forum in Beijing.

The influential three-day gathering is considered a bellwether of financial reform and opening up in China.

“Compared with the price fall of sovereign bonds of major economies so far this year, yuan bonds were one of a few maintaining stable prices,” Pan said. “They are quasi-safe assets.”

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