Index inclusion

Foreign funds prod China to reform bond market

The inflow of foreign funds into China's bond market is encouraging it to evolve so that it aligns more closely with international norms.
The Chinese government is liberalizing its bond market.
The Chinese government is liberalizing its bond market.

The expected surge of foreign funds flowing into China’s bond market, abetted by the inclusion of Chinese bonds in international indices, is spurring reforms in the world’s third largest bond market.

“When investors come in, the Chinese government will try to align its practices with global practices. That will make the market more healthy and give us more opportunities,” said Alex Leung, director of Hong Kong asset management firm Da Wan Asset Management, at the Fixed Income Leaders Summit in Hong Kong at the end of May.

Foreign fund flow into China through indices may spur better bond documentation in China, said Brad Gibson, co-head of Asia...

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