Net inflow of foreign investment into Chinese debt securities reaches around $47b

The net inflow of foreign investment into Chinese debt securities rose more than fourfold to $46.8 billion in 2024 as the comprehensive return from investments in yuan-denominated bonds kept stable, the State Administration of Foreign Exchange said on Friday.

Meanwhile, China attracted new capital for inward equity-based foreign direct investment worth $90.9 billion in 2024, showing that fundamentals of China's FDI remain stable, SAFE said in the annual balance of payments report for 2024.

Overall, the country's balance of payments maintained stability in 2024, with a current account surplus of $423.9 billion, accounting for 2.2 percent of the country's GDP and remaining within the "reasonable and balanced" range, the report said.

While the goods trade surplus remained strong, the non-reserve financial account registered a deficit, which SAFE attributed to active outbound direct investment (ODI) and outbound securities investment by Chinese enterprises optimizing their global layout.

SAFE also said on Friday that China's total outstanding external debt — including domestic and foreign currency-denominated debt — stood at $2.4198 trillion, down $27.7 billion, or 1.1 percent, from a year earlier.

This decline was primarily driven by exchange rate valuation effects, which reduced the debt balance by $36 billion, the administration said, while pointing to a continued shift toward yuan-denominated external debt, which made up 50 percent of the total, up 3 percentage points from the end of 2023.