China said Thursday it has extended tax preferential policies to overseas investors investing in the Chinese mainland bond market amid efforts to further open up the sector.

Overseas institutional investors are exempted from corporate income tax and value-added tax on their bond interest gains from investment in the Chinese mainland bond market, according to an announcement by the Ministry of Finance and the State Administration of Taxation.

The exemption took effect on November 7 and will last until December 31, 2025, the end of the 14th Five-Year Plan period, the announcement said.

Overseas institutional investors now can invest in China's interbank bond market through various channels, including the dollar-denominated Qualified Foreign Institutional Investors (QFII) and its yuan-denominated sibling Renminbi Qualified Foreign Institutional Investors (RQFII), direct market entry and the Bond Connect program.

The move was to implement the decision made at the State Council meeting on October 27, which said extending its preferential tax policy for overseas investors is part of efforts to promote opening up and attract foreign investment.

China's commerce ministry said in October foreign investment into the country is expected to exceed 1 trillion yuan ($157 billion) this year, despite complex external environment and pandemic.

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(With input from Xinhua)