SHANGHAI, March 7 Citigroup Inc said on
Tuesday that it will include China's onshore bonds in its
emerging markets and regional indexes, marking another victory
in Beijing's efforts to woo foreign investors to its bond market
to counter capital outflows.
The announcement by Citi Fixed Income Indices came days
after Bloomberg included China bonds in its global indexes
offering, and could prompt other index publishers to follow
Citi did not give a specific date for when China bonds would
be added to its indexes.
Citi said that it has been monitoring China's eligibility
since February 2016, when Beijing opened its interbank bond
market to foreign participants, and had now decided to include
China bonds in its indexes after an extensive review.
"We are pleased to see regulatory changes that enable market
access, allowing us to reflect and provide new investment
opportunities," Arom Pathammavong, global head of Citi Fixed
Income Indices, said in an email statement.
China has redoubled efforts to lure overseas investors and
bump up bond market inflows after relaxing rules on foreign
Last week, China opened its forex derivative market to
foreign investors, giving them a way to hedge foreign exchange
exposure in the country's bond market.
Encouraging capital inflows is part of efforts by Beijing to
protect the yuan, which fell 6.5 percent against the
dollar last year, and staunch a slide in its foreign exchange
Authorities in recent months announced a flurry of measures
that made it harder to move funds offshore.
Some market watchers have argued the moves to tighten
restrictions on outflows could dampen foreign investment in
China, as companies fear they will have trouble repatriating
At the end of 2016, foreigners held about 870 billion yuan
of Chinese bonds, just 1.5 percent of China's 56.3 trillion yuan
($8.16 trillion) interbank bond market.
JPMorgan predicted last May that Chinese government bonds
could receive at least $155 billion of investment flows should
China's market opening lead to their inclusion in various global
Citi said China bonds will be included in its three
government bond indexes – the Emerging Markets Government Bond
Index (EMGBI), Asian Government Bond Index (AGBI), and the Asia
Pacific Government Bond Index (APGBI).
(Reporting by Samuel Shen and John Ruwitch; Editing by Kim