China takes new steps to open $20 trillion bond market to foreigners



China took new steps on Friday to facilitate foreign investment in its $20 trillion bond market, saying it would cut service fees, improve access to foreign exchange hedging and streamline the account opening process.

China will also facilitate cross-border bond subscriptions and facilitate the trading of Chinese bonds by foreign passive funds, the China Foreign Exchange Trade System (CFETS), an affiliate of China’s central bank, said in a statement.

Foreign investors reduced their holdings of Chinese bonds for a fourth straight month in May as divergent monetary policies kept Chinese yields below their US counterparts.

The move aims to “promote greater openness of China’s bond market and deepen capital market reforms,” ​​said CFETS, which operates the platform for China’s interbank and forex trading.

To reduce trading costs for foreign investors, service fees under the Bond Connect program, a major cross-border channel for bond investors, will be reduced by 25% from July 11, according to CFETS.

And on Monday, CFETS will launch a cross-border bond underwriting service, making it easier for foreign investors to participate in China’s primary bond market.

The CFETS will make it easier for foreign investors to conduct forex hedging activities in China and will further extend trading hours in the onshore forex market. China will also improve a trading mechanism based on closing prices to better meet the needs of overseas passive bond investors.


Xi calls on new Hong Kong government to build bigger houses

Hong Kong’s expensive housing has long been a gripe for many city residents. President Xi Jinping has now made solving this problem a priority for the new government of John Lee.

Making housing more affordable for ordinary citizens is central to Beijing’s common prosperity agenda.

Former police officer Lee (left), sanctioned by Washington for his role in enforcing the Security Act, takes charge as the city faces an exodus of people and talent amid some of the strictest Covid-19 restrictions in the world (Reuters).

(Only the title and image of this report may have been edited by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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