It is worth noting that in the first quarter of this year, driven by the capital flow in the northbound bond market and other factors, the scale of onshore assets held abroad has significantly rebounded. Meanwhile, the strong southbound stock market funds under the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect mechanisms have also driven the expansion of the offshore RMB scale.

Standard Chartered said that the official data on onshore assets held abroad has continued to grow, increasing by 5.3% compared with the end of 2024. Among them, stocks, bonds, loans and deposits all showed positive growth. The driving factor for the recent increase in onshore bond holdings abroad has shifted from large-denomination certificates of deposit to Chinese government bonds and policy bank bonds, which may reflect the actual asset allocation demand (i.e., the increase in structural demand).

In terms of offshore RMB deposits, the southbound funds of the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect are on par with the northbound funds. In April, the net purchase scale of southbound funds increased to 167 billion Hong Kong dollars, exceeding the average monthly purchase scale of 146 billion Hong Kong dollars in the first quarter and far surpassing the average monthly purchase scale of 67 billion Hong Kong dollars in 2024.