Domestic Chinese bonds became part of a major global index on Monday, marking another milestone in the opening up of China's financial markets.
Hundreds of onshore Chinese bonds will be added to the Bloomberg Barclays Global Aggregate Index over the next 20 months. Analysts estimated that the full inclusion will attract around $150 billion of foreign inflows into China's roughly $13 trillion bond market — the third-largest in the world after the U.S. and Japan.
The index inclusion is the latest step in the opening up of China's financial markets to global investors. Last year, Chinese A-shares — yuan-denominated stocks traded on the mainland — were included in the MSCI Emerging Markets Index. China has also launched "connect" programs that allow investors to buy certain shares and bonds through Hong Kong's stock market.
"Today marks an important milestone as China's capital markets continue to find their place in the global investment mainstream," said Justin Chan, HSBC's co-head of global markets in Asia Pacific.