ICBC: China's financial market opening-up in the new era
With RMB's inclusion in the SDR basket in 2015, China's pace of internationalization in the financial market place has accelerated. In particular, CIBM, the 3rd largest bond market worldwide, has now become more open to overseas investors. The high yield, low volatility, and low correlation with other bond markets of CIBM have made it a perfect choice for overseas investors. By the end of 2017, 618 overseas investors had entered CIBM. The total CNY bond depository balance by overseas investors has exceeded 1 trillion yuan, and trading volume has reached 1.95 trillion. Stepping into 2018, Bloomberg announced that it will add Chinese RMB-denominated government and policy bank securities to the Bloomberg Barclays Global Aggregate Index, starting April 2019. It is estimated that the inclusion is expected to attract about 200 billion USD inflows into CIBM. Looking ahead, with the positive influence of index inclusion, as well as the prospect of stabilized RMB FX rates, overseas investors have a stronger interest in CIBM. China’s bond market is highly likely to be included into global indices, this final inclusion will encourage explosive growth.
ICBC would like to share its observations on market access methods, the extent of overseas investors' involvement in CIBM, as well as latest developments of the market from a more objective and comprehensive angle.