China’s bond market is the second largest bond market worldwide, with depository balance over 150 trillion yuan, forming a market dominated by interbank and exchange markets and supplemented by the over-the-counter market. China Interbank Bond Market (CIBM) was established in 1997. After over 20 years of evolution, CIBM has grown steadily in scale with enhanced financing function. The infrastructure in this market has been continuously improved amid growing diversity in market participants and trading instruments. The opening up of CIBM is also proceeding steadily. By the end of September 2023, the total depository balance of CIBM reached nearly 133 trillion yuan with market participants nearly 5,000 in terms of incorporated entities. The total trading volume in 2022 is over 1,800 trillion yuan. CIBM is the most important part of China bond market and stands to be the main trading venue for CGBs, policy bank bonds and NCDs, which are popular among overseas investors.

China’s bond market adheres to develop in market-oriented, law-based, and internationalized way. With the support of overseas investors, Chinese bonds have been successively included in the three major international bond indexes. Currently, Bloomberg Barclays Global Aggregate Index (BBGA) and the JPMorgan Government Bond Index-Emerging Markets (GBI-EM) have finished the inclusion. FTSE Russell has also announced the inclusion of Chinese government bonds in its World Government Bond Index (WGBI), over a period of 36 months from October 2021.

Under the guidance of the PBC, CFETS has jointly revised the China Bond Market Handbook (2023) with NAFMII, SHCH, ICBC, ABC, BOC, HSBC, Orient Securities, Citic Securities and BCCL. The Handbook reviews the organizational structure, investment products, trading mechanisms, opening-up policies, business processes of the China Bond Market, and puts the emphasis on the bond market development achievements, reform measures, opening-up optimization and infrastructures innovations. The Handbook further provides details of the market entry processes, investment and trading mechanisms, and FX conversion and hedging, which covers the issues of concern for foreign investors. Major policies and regulations related to investment in China bond market are also listed, which we hope would be of help for foreign investors to further understand CIBM and the relevant matters on market admission.