China's $13 Trillion Domestic Bond Market to Be Added to Global Benchmarks

The transcript discusses China's efforts to open its bond market and internationalize the yuan. Despite efforts by the People's Bank of China, foreign investors hold only 2% of the market due to liquidity issues and other challenges. The inclusion of Chinese bonds in global indices is expected to bring significant inflows, modernize the market, and support the yuan in the long term. However, immediate impacts on prices are not anticipated due to a phased inclusion process. Challenges such as lack of liquidity, restrictions on derivatives, and concerns about capital outflows remain.

What efforts has China made to open up its bond market and internationalize the yuan?

What are the expected inflows into the Chinese bond market according to Citigroup?

What are some of the challenges investors face in the Chinese bond market?

How does the lack of liquidity affect the trading of government bonds in China?

What long-term impacts are expected on the yuan and onshore bond prices due to the inclusion in the index?