The enlargement of the Bond Connect scheme, announced on Wednesday (Sep 15), gives Chinese investors another option for allocating capital offshore.
This month, AsianInvestor is running a series of stories on the decisions driving the fixed income choices of institutional investors as 10-year US treasuries drop further below zero.
Despite the introduction of Bond Connect last year, Beijing still has hurdles to clear if it is to attract more meaningful international flows to its debt market.
China has reportedly reopened the two schemes. This could mean Ucits funds are close to Bond Connect approval and that QDII is set to return, says Andy Seaman of Stratton Street.
Global investor monitoring and testing for the new China access programme is just beginning and early trading has largely relied on Chinese banks. But it's a decent start.
China and Hong Kong need to get their act together if Bond Connect is going to buck a run of disappointing trading links. Investors need to be able to hedge interest rate risk onshore.