Offshore Bond Repurchase Agreements in China Double to 1.2 Trillion Yuan
Foreign investors more than doubled their use of China's bond repurchase tool in August, reaching 1.2 trillion yuan following expanded access rules.
The Government of China saw a significant increase in the use of domestic bond repurchase agreements by offshore institutions in August. Monthly repurchase agreements, known as repos, reached 1.2 trillion yuan, more than double the 573 billion yuan recorded during the same period the previous year.
This surge follows a September 2025 policy decision to expand foreign investor access to the repo tool. The mechanism allows international institutions to raise short-term onshore yuan by selling bonds with a formal agreement to repurchase them at a later date.
Despite the growth in volume, broader participation in the market remains constrained. Low yields and ongoing legal friction continue to limit the extent to which global investors utilize these domestic bond holdings.
