Euroclear plans to open a link for international investors to access the Chinese bond market, which will allow renminbi-denominated debt to be used as collateral anywhere in the world.
The move from Euroclear, one of the world’s biggest securities depositories, is the latest step in China’s efforts to attract foreign investment into the country’s financial markets while promoting the global use of its currency. Euroclear plans to partner with China Central Depository and Clearing, a state-owned financial market infrastructure provider, to create the link.
The recent addition of some Chinese equities in MSCI’s flagship emerging markets index, as well as the planned inclusion of Chinese government debt in Bloomberg and JPMorgan Chase indices, are expected to usher a windfall of more than $2tn in foreign investments into the country over the next two years.