China

Index inclusion to boost liquidity in China’s bond market

The inclusion of Chinese bonds in international indices will foster a more mature bond market with liquid benchmark rates.
China's onshore renminbi bond market is increasingly open to foreign investors.
China's onshore renminbi bond market is increasingly open to foreign investors.

The inclusion of Chinese bonds in international indices will expand the influx of foreign funds, which is likely to boost liquidity in China’s government bond market. This will ultimately increase the depth and sophistication of the world’s third largest bond market and create more liquid benchmark rates, similar to benchmark Treasury yields in the US.

More indices are expected to include Chinese bonds after the Bloomberg Barclays Global Aggregate Index started to add Chinese government and policy bank bonds from the beginning of April. In the middle of the month, another global index provider, FTSE Russell, announced that it might upgrade the market accessibility level of China’s onshore...

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