The People's Bank of China (PBOC) is taking significant strides to open China's financial markets to the world. In a recent announcement, the central bank outlined several measures aimed at enhancing the accessibility and attractiveness of China's bond market for overseas investors.
One of the key initiatives is the continued support for the Bond Connect and Swap Connect programs. These programs facilitate smoother connections between China's financial markets and global markets, allowing overseas investors to engage more easily with China's bond and financial derivatives markets. As of January, over 1,129 overseas investors from more than 70 countries and regions have invested a total of 3.9 trillion yuan ($550 billion) in Chinese bonds.
In addition to supporting existing programs, the PBOC is working diligently to align China's bond market rules and regulations with international standards. Areas such as issuance, registration, rating, and taxation are being optimized to improve investment convenience for foreign institutions. This alignment is expected to make China's bond market even more appealing to global investors.
Chinese bonds have gained significant recognition internationally, now being included in the three major international bond indexes: Bloomberg Barclays, JPMorgan Chase, and FTSE Russell. This inclusion has contributed to a steady increase in foreign investment, with overseas investors having net bought Chinese bonds for 12 consecutive months, reaching a cumulative net purchase of over 1.8 trillion yuan as of January.
The PBOC is also enhancing the management system for panda bond issuance. By January, approximately 796 billion yuan of panda bonds had been issued by overseas institutions in China's market. Further measures are being implemented to facilitate investment and continue the opening of the bond market.
These efforts by the PBOC reflect China's ongoing commitment to integrating more deeply with global financial markets, providing greater opportunities for international investors, and fostering a more dynamic and open economic environment.
Reference(s):
Chinese central bank pledges further opening of financial market
cgtn.com
