Rising foreign investment in Chinese stocks and bonds shows deepening financial integration
A steady increase in foreign ownership of Chinese stocks and bonds reflects China’s deepening integration into global financial markets. At the end of 2013, foreign owners held a total of RMB744 billion of these assets. By the end of the first quarter of 2020, this figure had grown to RMB4.2 trillion.
China’s financial integration in global markets is likely to continue. Companies that provide global indices that drive institutional investing are increasing the weight of Chinese-listed firms in their indices. Even a delisting of Chinese companies from US stock markets would not be a major step towards a Chinese decoupling. Most of the capital raised by Chinese firms on US markets has come from international investors, and large Chinese firms can easily shift to a Hong Kong listing, where US and international investors can still buy shares. The market for capital is global, and excluding Chinese firms from listing in the United States will not reduce their access to international capital.
This PIIE Chart was adapted from Nicholas R. Lardy and Tianlei Huang’s blog post, "Despite the rhetoric, US-China financial decoupling is not happening.”