CSRC Unveils Plan to Boost Chinese Assets Globally

China Securities Regulatory Commission (CSRC) Chairman Wu Qing announced a comprehensive package of 10 policy measures on Monday aimed at deepening cooperation between mainland and Hong Kong capital markets, with a central focus on enhancing the international influence of Chinese indices and assets. The announcement came at the launch ceremony of the 5-year RMB government bond futures at the Hong Kong Exchange (HKEX) — the world’s first offshore RMB-denominated Chinese government bond futures product.

According to Xinhua News, Wu said the CSRC will support cooperation between mainland and Hong Kong index companies to launch more indices based on Chinese assets, promote ETF products positioned in China’s modern industrial system, and jointly enhance the international influence of Chinese indices and assets.

A Milestone in Financial Market Opening

The launch of the 5-year RMB government bond futures at HKEX marks a significant step in China’s financial market opening and RMB internationalization. Wu described the launch as “timely and a natural progression,” noting that international investors currently hold 3.2 trillion RMB in Chinese bonds, creating growing demand for interest rate risk management tools.

The product follows the April 24 implementation that allowed Qualified Foreign Investors (QFI) to participate in domestic treasury bond futures trading, limited to hedging purposes. As National Business Daily reported, this marks the second major milestone in the two-way opening of China’s interest rate derivatives market within just over three months.

Each contract has a notional value of 500,000 RMB with a margin of approximately 6,000 RMB per contract. The product uses cash settlement, distinguishing it from the physical delivery mechanism used in onshore CFFEX treasury bond futures. Thirteen initial liquidity providers — five banks and eight securities firms — will support the market, with approximately 93 futures brokers able to access the product.

Ten Measures for Deeper Cooperation

The 10 policy measures announced by Wu span five key areas: functional coordination, product coordination, ecosystem coordination, regulatory coordination, and governance coordination. Beyond the index cooperation initiative, the measures include supporting qualified mainland enterprises to list in Hong Kong, deepening futures market cooperation with more RMB-denominated products, and supporting securities and fund companies to expand internationally using Hong Kong as a base.

The Hong Kong Exchange described the launch as a significant addition to its fixed income and currency product ecosystem, complementing the existing Bond Connect and Swap Connect mechanisms. HKEX Chairman Tang Jiacheng called it “an important milestone” in building Hong Kong’s FIC product ecosystem, while CEO Chen Yiting noted it would “further support the development of Hong Kong’s RMB product ecosystem.”

Strengthening Hong Kong’s Role as RMB Hub

Hong Kong officials welcomed the launch as a key step in solidifying the city’s position as the world’s leading offshore RMB hub. Financial Secretary Chen Maobo said the launch “marks the upgrade of Hong Kong’s role from ‘connecting mainland and international markets’ to a hub for ‘two-way allocation and two-way risk management.’”

Chief Executive Lee Ka-chiu, who met with Wu Qing the day before the launch, said the product would help attract international investors to participate in the mainland bond market and hold RMB government bonds long-term. As Lianhe Zaobao reported, Lee described it as “a key step in perfecting the RMB product ecosystem.”

Hong Kong’s offshore RMB pool exceeds 1.1 trillion RMB, processing nearly 48 trillion RMB in settlements monthly. The dim sum bond market has seen annual issuance exceeding 1 trillion RMB in each of the past two years, with cumulative issuance surpassing 1.6 trillion RMB.

Implications for Global Investors

The launch addresses a critical gap for international investors. Fan Wenchao, Head of Fixed Income and Currency Product Development at HKEX, explained that without offshore hedging tools, foreign capital tends to sell spot bonds in a concentrated manner when interest rate expectations rise, causing large-scale cross-border capital flows and intensifying market volatility. The new futures product will help foreign capital hold spot bonds long-term and smooth short-term fluctuations.

The 5-year tenor was specifically chosen because it is a key point on the onshore treasury yield curve with large outstanding volume, and the average remaining maturity of offshore dim sum bonds is also approximately 5 years.

Zhou Zhaoping, Senior Vice President of Fixed Income and Currency Product Development at HKEX, emphasized that the onshore CFFEX and offshore HKEX treasury bond futures have complementary positioning rather than competing. Onshore products primarily serve domestic investors, while offshore products align with international investors’ trading habits with easier access and more convenient operations.

Broader Strategic Context

The announcement reflects China’s ongoing commitment to financial market opening and RMB internationalization. The Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connect have been operating for over 10 years with coverage of over 90% of stock market value in both directions. Since 2024, over 270 mainland companies have completed filing to list in Hong Kong, raising over 650 billion HKD, while 103 mainland securities, fund, and futures companies have established branches in the city.

Bloomberg Emerging Markets Chief FX Strategist Zhao Zhixuan noted that the launch “has significant meaning,” adding that offshore investors have strong interest in Chinese government bonds and China is actively promoting RMB internationalization.

What to Watch Next

Market observers will be watching the development of liquidity in the offshore treasury bond futures market and whether additional tenors, such as the 10-year, will be added to the product line. The CSRC is also working with Hong Kong authorities to advance preparations for including RMB stock trading counters and REITs into the Stock Connect, which could further expand the channels for international investors to access Chinese assets.

As Wu noted in his speech, the coordinated opening of onshore and offshore markets will not only provide international investors with convenient and efficient interest rate risk management tools but also promote close linkage between the two markets’ treasury bond spot, futures, and derivatives markets. The path forward suggests a continued expansion of China’s financial market connectivity with the global economy, with Hong Kong serving as the critical bridge.