A large screen in Shanghai displays stock market data on July 22, 2025. The benchmark Shanghai Composite Index rose 0.62 percent to close at 3,581.86, while the Shenzhen Component Index climbed 0.84 percent to 11,099.83 and the ChiNext Index advanced 0.61 percent to 2,310.86. Photo: VCG

Foreign capital is increasingly looking at the Chinese market in a positive light, backed by China's resilient market performance in the first half of 2025, with key indicators reflecting growing global confidence with the world's second-largest economy.

Chinese and foreign analysts said amid the current complex and changing environment, the Chinese equity and bond market, on top of the stability and predictability of China's economic development, are providing a new ground for global capital to hedge against risks and secure gains.

The world's second-largest economy is demonstrating strong economic resilience and continuing to inject policy-driven momentum into growth, contributing to greater stability for the global economy, they said.

From January to May, net equity-based foreign direct investment to China reached $31.1 billion, up 16 percent year-on-year, net inflows into China's securities market totaled around $33 billion, reversing the net outflows recorded in the second half of last year, said Li Bin, spokesperson for the State Administration of Foreign Exchange (SAFE), at a Tuesday press conference. Li said the overall investment inflows into China have remained strong, and outbound investment is also advancing in a steady and orderly manner.

In addition to the equity market, the bond market is also being held in a positive light. 

Jia Ning, another SAFE spokesperson, said foreign investors' allocation to renminbi-denominated assets has remained broadly stable this year, with a notable increase in holdings of renminbi (RMB) bonds. The total value of RMB bonds held by foreign investors now exceeds $600 billion, a record high.

Such trends underscore a broader expansion in sentiment. Amid growing global uncertainties, many foreign institutions and investors are increasingly optimistic about China's capital market.

Upbeat outlook

US-based Citibank raised its forecast for China's 2025 GDP growth to 5 percent in mid-June, stating that the annual target is within reach, according to a Citibank Tuesday statement the bank sent to the Global Times on Tuesday.

With official data now confirming a 5.3 percent expansion in the first half of the year, the foundation for achieving the full-year goal has become more robust, according to the statement.

"If growth remains resilient and prices begin to improve, the attractiveness of Chinese assets is likely to increase further," it said.

This is the latest example in a series of upbeat signals from major global financial institutions, reinforcing the recent trend of growing confidence in the Chinese market.

Shen Yufei, chief investment officer of Equities at BlackRock Fund, observed that China's macro environment and corporate earnings have undergone notable improvements, adding that there is every reason to remain optimistic about the performance of A-shares in the second half of the year, People's Daily reported on Sunday.

As of Tuesday, the total issuance of panda bonds, or yuan-denominated bonds issued by foreign financial institutions in China, had exceeded 1 trillion yuan ($137.5 billion), China Media Group (CMG) reported.

To date, panda bonds have been issued by more than 90 institutions. And, renminbi-denominated international financing, including panda bonds, now ranks as the second-largest bonds globally by volume, according to CMG.

The rising global appeal of renminbi assets is rooted in the stability and predictability of China's economic development. Strong macroeconomic indicators point to a sustainable growth path, providing a solid foundation for meeting the full-year target and underscoring the competitive edge of Chinese assets, said Li Changan, a professor at the Academy of China Open Economy Studies at the University of International Business and Economics.

For bonds, the vibrant market transaction underscores the strong confidence of internationally renowned issuers in China's long-term development prospects, and their continued commitment to deepening their presence in the giant Chinese market, Li said.

Recently, global sovereign wealth funds also showed a significant resurgence of interest in China amid global fragmentation and policy uncertainty, according to a report sent by investment management company Invesco to the Global Times on Monday.

Most respondents expect to increase their allocations to China over the next five years, with this share standing at 59 percent.

Sustained support

Among the world's major economies, China continues to deliver medium-to-high growth, underpinned by political stability and consistent policymaking that help mitigate systemic risks. In contrast, policy uncertainty and volatility remain major challenges in other markets, said Hu Qimu, deputy secretary-general of Forum 50 for Digital-Real Economies Integration.

China's core economic strengths remain robust, including a vast domestic market, a complete industrial system, and growing innovation capacity, Hu told the Global Times on Tuesday, noting that ongoing efforts to strengthen weak links in industrial and innovation chains continue to enhance the country's global competitiveness and appeal to international capital.

Global confidence in the Chinese market is well-founded. In the face of growing global uncertainties, China's continued commitment to high-level opening-up is a major driver of investor confidence, the expert said.

Data released by the National Bureau of Statistics (NBS) on July 15 showed that China's GDP grew by 5.3 percent year-on-year in the first half of 2025. In the second quarter, the economy expanded by 5.2 percent from a year earlier.

Following the release of the economic data, major international financial institutions - including UBS and Morgan Stanley - revised upward their forecasts for China's full-year GDP growth for 2025.

In the first half of the year, China intensified policy support and advanced its high-level opening-up agenda, reinforcing confidence among foreign investors. Measures included significantly easing market access restrictions for foreign capital and refining the regulatory framework for qualified foreign investors, among others.

For example, China has recently introduced new measures aimed at encouraging reinvestment by foreign-funded enterprises, according to a circular jointly issued by seven government agencies, including the National Development and Reform Commission.

According to the circular, the measures cover a wide range of areas, including stronger project support services, streamlined procedures for setting up new reinvested entities, and innovative financial products and services to help foreign-funded companies deepen their presence and achieve long-term development in the Chinese market, Xinhua News Agency reported on Friday.

On July 17, a senior executive at Roland Berger commended China's macroeconomic policies for their strong role in supporting economic growth, in remarks to the Global Times.

"So far in 2025, we have seen a series of concrete actions taken by the Chinese government, from macro-policies support to proactive foreign activities in Asia and the Global South, navigating the economy through the turbulence and uncertainties," Denis Depoux, Global Managing Director of Roland Berger, said in a statement sent to the Global Times. 

China remains committed to advancing high-level opening-up while pursuing progress with stability. Amid growing global volatility, the country has demonstrated consistent policymaking and an inclusive approach, offering reassurance to international investors, Cong Yi, a professor at the Tianjin School of Administration, told the Global Times on Tuesday.

In contrast to rising policy uncertainty in other major economies, China has sent a clear message of openness to foreign capital and a willingness to share the dividends of its growth - reinforcing global confidence in the long-term prospects of the Chinese market, according to Cong.

Thanks to strong policy measures, experts remain optimistic about China's economic prospects for the second half and the full year.

This positive outlook is underpinned by the country's accelerating industrial transformation and structural upgrades, with notable progress in technological innovation driving substantial growth potential in emerging sectors, Cong told the Global Times.

"For investors focused on innovation-driven assets, the Chinese market presents significant and expanding growth opportunities," Cong said.

A total of 24,018 new foreign-invested enterprises were established on the Chinese mainland in the first five months of 2025, representing year-on-year growth of 10.4 percent, according to the Ministry of Commerce.

Notably, foreign investment in the e-commerce services sector jumped by 146 percent, while investment in the aerospace equipment manufacturing sector increased by 74.9 percent.

Cong said China will continue to strengthen support for strategic emerging and future industries to foster new quality productive forces. Pro-consumption policies are also expected to continue, helping to expand domestic demand. In addition, foundational tools such as employment and social security policies will play a key role in boosting income and strengthening market momentum.

He emphasized that these clear policy signals reflect the government's firm commitment to high-quality development and will help stabilize market expectations and bolster investor confidence.

In the second half of the year, monetary policy will prioritize targeted support, using liquidity tools to revitalize business activity and stabilize employment and the broader economy, according to Hu.