Highlights in the Q3 report

FTSE Russell is set to add Chinese government debt to its World Government Bond Index (WGBI) in 2021 subject to further confirmation in March 2021. The decision follows FTSE Russell’s assessment of improvements in market liquidity, foreign exchange and settlement flexibility in China bond markets, among other factors.

The internationalization of China’s debt markets is accelerating and has unleashed a flood of inbound investment in 2020, especially investment into China’s policy bank bonds. Net inflows into policy bank bonds totaled RMB347 billion (US$51 billion) in the first three quarters of the year, versus inflows of RMB350 billion (US$55 billion) into government bonds within the same period of time.

In addition to announcing other new measures, China’s regulators extended bond trading by three hours in its interbank market from end-September, in a move aimed at making trading convenient for investors outside of China time zone.