HONG KONG (AP) – Global investor access to China’s financial markets is widening further with the launch of a bond trading link with Hong Kong.
Officials banged a gong and clinked glasses of champagne on Monday morning as they officially kicked off trading on the long awaited Bond Connect link.
It’s the latest channel to link up financial markets in Hong Kong, a global financial center, and mainland China, where authorities are gradually lowering restrictions for overseas investors.
Initially, investors can get “northbound” access via Hong Kong financial institutions to mainland China’s interbank bond market. It’s the world’s third largest at $9.4 trillion in value but international investors own less than 2 percent of it.
Bond Connect does away with onerous requirements for outsiders and eases worries about taking profits out of China, but downsides include worries about the depreciating yuan and reliability of China’s domestic credit rating agencies.