Bond market to maintain its appeal

China's domestic bond market is expected to remain appealing to overseas capital as the amount of bonds held by overseas investors has increased drastically since last year, and the Chinese government steps up its efforts to liberalize the domestic market.

While some negative factors have had an impact, such as escalating trade tension with Washington pressuring the exchange rate of the yuan and worries on rising defaults risks, there is much growth potential for foreign investors to participate in, analysts said.

Foreign holdings have increased for 17 consecutive months, with the value of outstanding bonds at 1.35 trillion yuan ($197.1 billion) by the end of July, up by 60.9 percent compared to the same period last year, data from the China Central Depository and Clearing Co showed.