The country has slowly liberalised its financial markets, but it can do more to attract international investors, says the Asia Securities Industry Financial Markets Association.
Big fixed income investors will see the newly approved China-Hong Kong bond trading link as inferior to other access channels, though smaller players should find it useful, say industry experts.
A bond-trading link between Hong Kong and China is unlikely to attract strong retail flows and could distract from the opening of the mainland interbank debt market, says the association's CEO.
China's onshore and offshore bond markets are likely to be connected to each other in the coming months, AsianInvestor has been told. This is despite concerns over the different trading systems used.
The industry association says share-transfer and pre-delivery rules are preventing long-only managers from using the trading link. It expects regulators to tackle the latter issue early in 2015.
Charles Li, chief of Hong Kong Exchanges and Clearing, voices confidence that uncertainties surrounding tax issues will be cleared up before the trading scheme’s launch next week.