In recent years, China's bond market has been opening up to foreign investment at a steady and rapid pace, continuously enhancing its attractiveness to global capital. In this process, Bank of China has deeply integrated itself into the overall national strategy of opening up, proactively acting as a "financial bridge" connecting domestic and international markets. Leveraging its global network and comprehensive product pricing system, it has become the preferred market maker for overseas institutional investors' bond transactions.
In the past three years, the Bank of China has maintained a bond trading volume of over one trillion yuan with overseas institutional investors, keeping it a market leader.
To facilitate smooth north-south connectivity and build a main channel for interconnectivity
In 2017, Bond Connect's "Northbound Trading" was officially launched, marking a significant milestone in the opening up of China's bond market. As one of the first market makers, Bank of China actively participated, consistently ranking among the top in trading activity. To date, Bank of China has established counterparty relationships with over 500 overseas institutions and has been recognized as an "Outstanding Market Maker" for Bond Connect's "Northbound Trading" for eight consecutive years.
Following the launch of the Southbound Connect in 2021, which enabled two-way traffic between the north and south, Bank of China became one of the first pilot custodian and clearing banks for the Southbound Connect in mainland China; BOC Hong Kong became one of the first market makers for the Southbound Connect and was designated by CMU as the exclusive agent bank for interest payment and settlement, providing solid financial infrastructure support for "bringing in" and "going out".
●【Tip】Where is the "Bond Connect" available?
Bond Connect is a cooperative mechanism for interconnecting the bond markets of mainland China and Hong Kong.
"Northbound Connect" refers to overseas investors investing in the mainland's interbank bond market via Hong Kong. Its biggest advantage is "single-point access," allowing overseas investors to conveniently enter the market through the connection of infrastructure between the two places without having to change their own business habits.
"Southbound Connect" refers to mainland investors using infrastructure connections to invest in the Hong Kong bond market.
Deepening the application of "swapping" to enrich the toolbox of interest rate risk management
In 2023, the "Swap Connect" was officially launched, marking another step forward in the opening up of China's bond market. Bank of China participated in the first batch of transactions in the entire "Swap Connect" market at the earliest opportunity and has been working hard to expand its customer base, becoming one of the most active domestic quoting firms on the "Swap Connect".
In addition to actively assisting investors in completing transactions, Bank of China was also among the first to launch new contract trading and contract compression services offered by the People's Bank of China and infrastructure institutions, greatly enriching the interest rate risk management toolbox for overseas investors.
●【Tip】What is "Exchange Pass"?
As overseas investors continue to increase their allocation to RMB assets, the demand for interest rate risk management is growing.
The initial launch of the "Northbound Swap Connect" allows overseas investors to participate in the mainland interbank financial derivatives market without changing their trading habits, and to conveniently complete RMB interest rate swap transactions and centralized clearing. This helps overseas investors manage interest rate risk, thereby further stimulating their enthusiasm for increasing their holdings of RMB bond assets.
Upgrading "repurchase" enhances liquidity management efficiency
In September 2025, the People's Bank of China, the China Securities Regulatory Commission, and the State Administration of Foreign Exchange jointly issued a document to further liberalize bond repurchase business for overseas institutional investors.
Bank of China responded proactively and was successfully selected as one of the first batch of market makers for the Bond Connect "Northbound Trading" repurchase program. It also assisted many overseas institutional investors in successfully launching bond repurchase transactions, becoming one of the first domestic financial institutions to achieve a business breakthrough under the new policy, thus empowering overseas institutional investors to improve the quality and efficiency of liquidity management.
●【Tip】What are the breakthroughs in this opening of "bond repurchase"?
Bond repurchase agreements are essentially a means of borrowing money (reverse repurchase) or lending money (back repurchase) using bonds as collateral, and are an important short-term financing tool.
This opening has two key aspects: First, it expands the investor base. Whether through direct market access (CIBM) or through Bond Connect, overseas institutions can now participate in repurchase transactions. Second, it aligns with international trading practices. The business adopts internationally accepted bond transfer models, which are more in line with the habits of overseas investors, allowing them to more flexibly utilize their RMB bond assets and significantly enhancing the attractiveness of RMB bond assets.
China's bond market opening process continues unabated, with Bank of China taking the lead with a series of "first-of-its-kind" initiatives. Leveraging its global institutional network, it continuously provides investors with comprehensive financial services characterized by "24/7 responsiveness and localized support." It has established a full-product pricing system covering funds, spot bonds, and derivatives, possessing full licenses such as market maker and settlement agent, and is a major market maker in the interbank bond market. Utilizing the group's global advantages, it provides investors with a "one-stop" full-chain service from agreement signing and pricing to clearing and settlement. With its excellent market-making capabilities and rich service experience, it efficiently meets investors' investment, financing, and hedging needs through direct price inquiries, placing it in a leading position in the market.
Bank of China will continue to leverage its advantages in cross-border business, actively build bridges between China and international capital markets, continuously enrich its multi-tiered product offerings, and contribute more to the high-level opening up of China's financial market.
