China's $13 trillion onshore bond market makes global index debut

Foreign capital flows to China are expected to rise from Monday after a portion of the nation's nearly-$13 trillion of onshore bonds were included in a key global index.

On Monday, China's renminbi-denominated government and policy bank securities were included in the Bloomberg Barclays Global Aggregate Index, a global fixed-income investment benchmark, which could trigger more capital inflows into the country and provide stability to currency and fund borrowers.

Global banks have predicted that the Bloomberg Barclays index inclusion will attract $700 billion to $800 billion of overseas funds for the next five years. More than 67 percent of the market participants in Asia are likely to increase their investment in Chinese onshore bonds this year, driven largely by the index inclusion, said a recent survey from Bloomberg, the US-based financial information provider.