Bond Connect: Game-Changer or Mere Hype?

By Zhang Yuzhe and Dong Tongjian

(Beijing) — Allowing overseas investors to trade Chinese onshore bonds via Hong Kong, probably starting later this year, is Beijing’s latest attempt to rev up its massive yet illiquid bond market while further integrating its financial markets with the former British colony.

This is the first leg of a program formally known as Bond Connect. Within two years or so, the program will allow mutual access between China and Hong Kong bond markets, according to the operator of the Hong Kong Stock Exchange. Bond Connect is seen as a sequel to Hong Kong’s stock-trading links with Shanghai and Shenzhen, or Stock Connect, launched in 2014 and 2016 respectively.

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