On the 3rd anniversary of the opening of the "Bond Connect" on China News Service on July 3, the central bank's WeChat public account said on July 3 that in July 2017, "Bond Connect" was launched in due time, with the original direct market entry and QFII, RQFII and other open channels coexisting with each other complement each other, which satisfies the needs of foreign investors, and promotes the further opening up of China's bond market. At present, the balance of China's bond market is 108 trillion yuan, ranking second in the world.
Data Map: People's Bank of China. China News Service reporter Zhang Xinglong
The central bank pointed out that in recent years, the People's Bank of China has adhered to the principles of rule of law, marketization, and internationalization, actively and steadily promoted the reform and development of the financial market, continuously deepened the institutional and systematic opening of the bond market, and made remarkable progress.
In 2010, the People's Bank of China approved three types of overseas institutions, RMB Qualified Foreign Institutional Investor (RQFII) and Qualified Foreign Institutional Investor (QFII) to invest in China's interbank bond market. In 2016, the scope of investors was further expanded to various overseas financial institutions and their investment products.
In July 2017, "Bond Connect" was launched in due course. Through the connectivity between the Mainland and Hong Kong financial market infrastructure, international investors can access and invest in one point without changing the original trading settlement system arrangements and habits. All types of bonds in the inter-bank bond market are an important milestone in the opening up of China's bond market. Bond Connect complements the original open mode of direct market entry and the coexistence of multiple channels such as QFII and RQFII, which satisfies the needs of foreign investors and promotes the further opening of China's bond market to high-quality development.
At present, the balance of China's bond market is 108 trillion yuan, ranking second in the world. As of the end of June 2020, a total of nearly 900 foreign legal entities have entered the inter-bank bond market, covering more than 60 countries and regions around the world. The scale of holding RMB bonds is about 2.6 trillion yuan. Since 2017, the annual growth rate has been nearly 40%. At present, the scale of debt held by foreign institutions accounts for 2.4% of the total amount of China's bonds, and the scale of holding government bonds accounts for 9%.
In the next step, the People's Bank of China will continue to strengthen the construction of the basic system of the financial market together with relevant departments, continue to increase the depth of the bond market, improve the risk hedging mechanism and supporting system arrangements such as rating and taxation, and further improve the convenience of international investors to enter the market. In order to meet its allocation requirements for RMB assets, high-quality and deepen market opening and development.