Chinese investors may soon be allowed in foreign bond markets

Mainland authorities are close to establishing southbound bond trading, Julien Martin, general ,anager at Bond Connect Company Limited (BCCL), recently revealed.
The new arrangement will allow mainland Chinese investors to enter foreign bond markets.
The executive added that the authorities are in search of ways to ease the pressure on an inflating Chinese currency.
As of February, 3.5% of Chinese bonds denominated in Chinese yuan were held by foreign investors. With a stable inflow of bond investments, the value of the Chinese yuan has risen by 10% since the low in May last year.
In response, Chinese authorities are in search of channels to stabilize the rising currency.
“When there is such a significant influx of capital, there will be a need for outflux,” Martin said.
BCCL is a joint venture established by the China Foreign Exchange Trade System and the Hong Kong Stock Exchange to support Bond Connect related trading services. Established in Hong Kong in 2017, BCCL supports the admission and registration of northbound investors, and liaises closely with the recognized access platforms through which international investors are able to trade certain Chinese financial products. AL