Bloomberg will begin including RMB-denominated Chinese government and policy bank bonds in its Bloomberg Barclays Global Aggregate index from April, the first time Chinese debt has entered a major global index
The move is expected to bring $100 billion of capital into China’s bond market, the third-largest in the world at $11 trillion.
Several other global indexes are considering adding Chinese bonds, including the Global Emerging Market Bond Index, run by JPMorgan, and the World Government Bond Index, which belongs to the London Stock Exchange.
China has been prioritizing the opening-up of its financial markets to attract more foreign capital. Beijing recently announced plans to expand foreign investors’ ability to invest through the country’s two main inbound investment channels.
Foreign investors currently hold just 2% of bonds in China’s bond market, according to government data.