SHANGHAI :
China, Hong Kong May Refine Bond Connect Program Next Year, Allow Southbound Investment
Xu Wei
DATE:  Dec 22 2017
/ SOURCE:  Yicai
China, Hong Kong May Refine Bond Connect Program Next Year, Allow Southbound Investment China, Hong Kong May Refine Bond Connect Program Next Year, Allow Southbound Investment

(Yicai Global) Dec. 22 -- China's State Administration of Foreign Exchange is looking at optimizing infrastructure and institutions for the Bond Connect program with Hong Kong, local news outlet Hong Kong Economic Times quoted Norman Chan, chief executive of the Hong Kong Monetary Authority, as saying.

The Bond Connect will look to introduce Hong Kong-bound investment in future, as it currently only caters to overseas investors looking to buy bonds on the mainland, Chan said. China's cabinet-run State-owned Assets Supervision and Administration Commission will also encourage more centrally-owned companies to set up financial centers in the special administrative province, he added.

Chan expects more foreign investors to be able to invest in the mainland bond markets next year, and that overseas demand for Chinese bonds will rise as the yuan's exchange rates stabilize alongside the nation's economy.

Bond Connect is a mutual market access scheme began this year to allow mainland and overseas investors to trade in their respective bond markets via financial institutions in Hong Kong.  Northbound investment, i.e. international investment into the mainland, opened on July 3.

The program has been running smoothly since its inception, Eddie Yue, one of Chan's deputy chief executives, said early last month, adding that more than 180 institutional investors have joined. Hong Kong's quota for RMB Qualified Foreign Institutional Investors was lifted to CNY500 billion in the same month the program started.

There are still improvements needed to make the Bond Connect more practical, he said, adding that such issues as unclear tax arrangements needed to be cleared up as soon as possible.

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Keywords:   Chan Tak-Lam Norman,Hong Kong,Bond Connect