China opens up $10 tn bond market in liberalisation step
SHANGHAI: China on Monday widened access to its $10 trillion bond market, which analysts said will boost Beijing’s drive to internationalise the yuan and more deeply integrate its markets with the world financial system.
The new window for foreign investors was opened via Hong Kong, where “qualified investors” will be able to buy bonds in China — the world’s third-largest bond market after the United States and Japan.
Qualified investors include central banks, sovereign wealth funds, and other major financial institutions, according to the People’s Bank of China (PBoC) and the Hong Kong Monetary Authority, who jointly announced the move on Sunday.
Their statement said the “bond connect” platform between the Hong Kong and mainland Chinese markets went into “experimental operation” from Monday.
The move coincided with weekend celebrations for the 20th anniversary of Britain’s handover of Hong Kong to Beijing in 1997.
The PBoC said in a statement on Monday that the new platform would promote integration between Hong Kong and mainland China, “promote Hong Kong’s long-term prosperity and stability, and provide a more convenient investment channel for overseas investors”.
“It will also steadily push forward the opening up of China’s financial market,” it said.