Global multi-asset index provider FTSE Russell said on Thursday that it will add Chinese government bonds to its flagship World Government Bond Index (WGBI) from October 2021.

Goldman Sachs projected it would attract 140 billion U.S. dollars over the 12-month phase-in period. Before FTSE Russell, Chinese bonds had already been included in the Bloomberg Barclays Global Aggregate Index (BGAI) and J.P. Morgan's Government Bond Index-Emerging Markets (GBI-EM).

Waqas Samad, FTSE Russell's chief executive and director of information services for the London Stock Exchange Group said in a statement that the Chinese authorities have worked hard to enhance the infrastructure of their government bond market. "Subject to affirmation in March 2021, international investors will be able to access the second largest bond market in the world through FTSE Russell's flagship WGBI," he said.

The People's Bank of China (PBOC) on Friday said it welcomes FTSE Russell's announcement to include Chinese bonds in its WGBI.

Pan Gongsheng, deputy head of the central bank, said in a statement that the decision reflected global investors' confidence in China's sound, long-term economic development as well as its further opening-up of the financial sector.

China's bond market was worth about 112 trillion yuan (about 16.44 trillion U.S. dollars) as of August this year, of which 2.8 trillion yuan of bonds were held by international investors, said the PBOC, noting that international investment in China's bond market has surged at an average annual rate of nearly 40 percent in the past three years.

(With input from Xinhua)