Foreign institutions continue to pile into Chinese government bonds in 2023.

Offshore institutions are recorded to have purchased a net of RMB 1 trillion in Chinese government bonds since the beginning of the year, with the amount in October alone exceeding RMB 200 billion.

This figure is expected to reach RMB 250 billion in November, as the Federal Reserve is seen ending its rate hikes and Beijing goes all out to support its financial markets and real estate sector.

The net inflows are a reflection of foreign institutions’ confidence that Beijing will be able to contain the risks stemming from several major developers defaulting on their financial obligations.

Foreign institutions hold RMB 3.3 trillion ($460 billion) worth of Chinese bonds, which is a drop in the bucket compared with China’s $12 trillion onshore credit market.