China Eases Outbound Investment, Launching Southbound Leg of Bond Connect
(16 September 2021 – Hong Kong) The long-anticipated southbound leg of the Bond Connect scheme will be launched on September 24, more than four years after the Northbound leg expanded foreign investors’ access to China’s bond market.
The People’s Bank of China said that 41 mainland banks, as well as participants in China’s Qualified Domestic Institutional Investor (QDII) and Renminbi QDII schemes, would participate in the new arrangement.
The scheme will feature an initial daily quota of 20 billion yuan ($3.11 billion), and an annual quota of 500 billion yuan. This contrasts with the Northbound leg which has no quota.
This announcement comes less than a week after China kicked off a new Wealth Management Connect program, another cross-border link that enables cross-selling of investment products between qualified investors within the 11-city cluster Greater Bay Area.
“The southbound trading will deepen the two-way opening up of the mainland financial markets and promote the vibrant development of the Hong Kong bond market and hence strengthen Hong Kong’s status as an international financial center,” said Hong Kong Monetary Authority (HKMA) chief executive Eddie Yue Wai-man.
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