The latest data from China’s central bank indicates that country’s bond market is currently the world’s second largest.
Data released by the People’s Bank of China (PBOC) on 3 July indicates that China’s bond market balance currently stands at 108 trillion yuan (approx. USD$15.28 trillion).
As of the end of June nearly 900 offshore institutional investors from over 60 countries had entered China’s interbank bond market, holding approximately 2.6 trillion yuan in debt, for a near 40% increase each year since 2017.
PBOC highlighted efforts since 2010 to allow overseas investors to enter China’s interbank bond market via the Renminbi Qualified Foreign Institutional Investor (RQFII) and the Qualified Foreign Institutional Investor (QFII) initiatives.
In 2016 the investment scope was further expanded to encompass all types of foreign institutions and their investment products, while July 2017 saw the launch of the Bond Connect initiative to link mainland market infrastructure with the Hong Kong financial market, and provide foreign investors with another channel of access.
PBOC said that it would work with other government authorities to continue to strengthen financial market infrastructure, raise the “depth and breadth” of the bond market, improve risk buffer mechanisms and assessments, and further raise convenience for international investors to enter the market.