On 31 Jan 2019, Bloomberg made an official announcement that Chinese government bonds and policy bank bonds denominated in Renminbi will be included in the Bloomberg-Barclays Global Composite Index from April 2019.
The process is expected to take place over 20 months and is the result of coordinated sets of supporting measures by the People’s Bank of China, the Ministry of Finance and the State Administration of Taxation.
Upon full inclusion, RMB-denominated Chinese bonds are expected to emerge as the fourth largest denominated currency bonds. US dollar, the Euro and Japanese Yen will still remain as the top 3 largest denominated currency bonds.
Based on data as of 24 Jan 2019, a total of 363 Chinese bonds will be included in the Bloomberg Barclays Global Composite Index, representing about 6.03% of the market index or USD 5.4 bln in market capitalization.
As part of People’s Bank of China, the Ministry of Finance and the State Administration of Taxation’s plan to enhance investor confidence and improve market access, they have administered a series of market reforms such as incorporating the global composite index, facilitating the implementation of securities settlement, allowing the distribution of bulk transactions among different portfolios, and clarifying its tax policies.
From April 2019 onwards, RMB-denominated Chinese bonds will also be included in the Global Treasury Bond Index and the Emerging Market Local Currency Government Bond Index.3
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