So say US ratings agency Fitch in a latest note 5 July
Eamonn had the initial story here
The scheme, launched on 3 July, is part of broader government reforms to open up China's onshore bond market, the third largest in the world after the US and Japan. Since February 2016 foreign institutional investors approved by the regulator have had access to CIBM through the CIBM Direct scheme which imposes no quota limitations or restrictions on repatriation, unlike previous schemes.
Say Fitch:
The "Bond Connect" scheme that provides a new channel for foreign investors to access China's onshore interbank bond market (CIBM) is another example of the authorities' recent efforts to encourage portfolio inflows, and may help put renminbi internationalisation back on track after a lack of progress in recent years.
Improved foreign access to the onshore bond market may encourage wider inclusion of Chinese bonds in major indices, which could further boost foreign investment. Bond Connect should also bolster growth of fixed-income professionals capable of selling Chinese securities to foreign investors, which will be important in expanding foreign participation.
However, the government is likely to continue to tread carefully over broader capital account liberalisation, given the potential risks that net outflows could pose to financial stability. Accordingly, Bond Connect does not yet allow Chinese investors to buy overseas bonds - it is north-bound only - which is in keeping with our view that the authorities will remain cautious towards removing outflow restrictions, while loosening those on inflows only gradually.
Full report here
New Bond Connect scheme from China should boost inflows
