Shanghai FTZ to trial bond market opening up

China (Shanghai) Pilot Free Trade Zone (Shanghai FTZ), a pioneer of financial reform and opening up, is taking the lead in trialing bond market opening up, as required by the developing trend of China's bond market, the authorities said at the 2017 Chinabond Annual Conference which took place in Shanghai on July 20-21.

Shanghai FTZ will innovate its bond issuance mechanism, offering Chinese and foreign issuers a more flexible and convenient environment to raise capital worldwide, said Chen Gangming, general manager of China Central Depository & Clearing Co.

Chen added that the FTZ will also encourage its overseas and domestic investors to use more risk hedging tools, to make itself a significant bridge that links onshore and offshore markets.

In this way, Shanghai's status and competitiveness as an international financial center will be strengthened, with the bond market forming an important part of the city's international financial center construction.

Li Jun, deputy director of Shanghai Financial Service Office, said that the opening up of the bond market will help to facilitate the internationalization of Chinese currency and build a renminbi asset pricing center, which is conducive to Shanghai's goal of developing into an international financial center.

Li also introduced that Shanghai's well-developed infrastructure and financial advantages will lay a solid foundation for bond market opening up.

For instance, the city currently boasts more than 1,500 banks and securities, insurance and funds firms. It also gathers an abundance of bond-related insurance, trading, registering, and clearing institutions, such as China Foreign Exchange Trading System & National Interbank Funding Center, and Shanghai Clearing House.