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Govt
China to lure foreign investors through further opening up its bond market
CKN
2019/01/17 08:31:20
1,689
China's News, China's Financial News, foreign investors

Jan 17, 2019 (China Knowledge) - Pan Gongsheng, deputy governor of the People's Bank of China (PBOC), said at today's that China will establish a more open, transparent, safe and efficient bond market. He was talking at the China bond market international forum held in Beijing earlier today.

According to Pan, the default rate in China's bond market is relatively low, with the default rate of China's credit bonds at 0.79% in 2018.  Deputy governor deems that a certain default rate would help the long-term development of China's bond market.

He indicated that China's bond market is attractive to foreign investors, so the next step of Chinese government will be the further open up of the bond market; in order to do that three main measures will be carried out:

1. Launch bond ETF index products; improve bond central depository institution (CSD) connectivity

2. Support different settlement cycle needs of foreign investors; to study and optimize the participation of foreign investors in foreign exchange hedging transactions

3. Repo transactions will be opened up and the use of RMB derivatives will be promoted

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