The People's Bank of China (PBOC), the central bank of the Chinese mainland, announced plans on Sunday to further open up the region's financial markets. This move aims to foster stronger connections between the Chinese mainland's markets and global investors.
One of the key initiatives includes continued support for the Bond Connect and Swap Connect programs. These programs enable overseas investors to access the Chinese mainland's bond market and financial derivatives market, providing more opportunities for international investment.
As of January, over 1,129 overseas investors from more than 70 countries and regions had invested 3.9 trillion yuan ($550 billion) in Chinese mainland bonds. This highlights the growing interest and confidence from global markets.
The PBOC is set to align the Chinese mainland's bond market rules with international standards, focusing on areas such as issuance, registration, rating, and taxation. These changes are expected to make investing in Chinese mainland bonds even more convenient for foreign institutions.
Additionally, Chinese mainland bonds have been included in three major international bond indexes: Bloomberg Barclays, JPMorgan Chase, and FTSE Russell. This inclusion helps enhance the visibility and credibility of the Chinese mainland's bond market on the global stage.
Overseas investors have been consistently buying Chinese mainland bonds for 12 consecutive months, with total net purchases surpassing 1.8 trillion yuan as of January. This sustained interest underscores the attractiveness of the Chinese mainland's financial markets.
The PBOC also plans to improve the management system for issuing panda bonds, which are yuan-denominated bonds issued by foreign entities in China. By January, overseas institutions had issued approximately 796 billion yuan in panda bonds. The central bank will continue to coordinate bond market opening and implement measures to facilitate further investment.
