File Photo: GT

China expects overseas capital to further flow into its domestic financial markets as the country moves to open up its financial sector at a faster pace, a central bank official said on Sunday. 

"It has become an important characteristic in China's cross-border capital that there's an increasing amount of overseas capital that has flowed into China's stocks and bonds markets," Pan Gongsheng, deputy governor of the People's Bank of China, China's central bank, said at an annual conference held by the Economic Daily. 

He disclosed that overseas investors held $283.8 billion worth of domestic stocks by the end of November 2019, 1.1 times more than the value of domestic stocks held at the end of 2016. 
The amount of domestic bonds held by overseas investors also surged by 1.6 times to $324.8 billion. 

"In the future, China's international balance of payments will keep a balanced state, while cross-border capital inflow will grow," Pan said. 
The increasing inflow of overseas capital into the mainland’s stock markets is pushing the A-share market up in its bull market trajectory. The year 2020 has just arrived less than two weeks ago, and the benchmark Shanghai Composite Index has already edged up by nearly 1.4 percent. 

"Overseas capital is buying domestic shares, even though some of the stocks already saw their share prices touching a historic high. This shows that overseas investors are very optimistic about the equities of outstanding companies listed on the A-share markets, regardless of their temporary stock price fluctuation," said Yang Delong, chief economist at the Shenzhen-based First Seafront Fund Management. 

Pan also noted that China's cross-border capital flow was generally stable in 2019 and so was the yuan's exchange rate compared with many other overseas currencies. 

Global Times