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.
Several operational issues with the mutual market access scheme linger six months after launch. We identify the five most pressing issues preventing more investor participation.
While some fixed income experts hope Chinese bonds will be included in major indices this year, others feel issues with Bond Connect will delay such inclusion into 2019.
But it may be some time before China inks its own cross-border funds agreement with another country.
Investors look set to use the Chinese cross-border scheme for some years yet. It still offers certain advantages over Stock Connect, including lower trading costs, say fund executives.
Harvest Global Investments has qualified for the Switzerland-Hong Kong mutual recognition of funds scheme, but the hard work is to come – and it will take time.