PBOC's Pan Gongsheng pledges fresh support for global investors, push for renminbi bonds as collateral
The central bank governor says China will widen foreign access to its bond market, building on steps already taken this year to open it to overseas investors.
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People's Bank of China governor Pan Gongsheng said the central bank will take further steps to support global investors and issuers in China's financial market. He said the PBOC will work to make renminbi bonds a globally recognised and eligible form of collateral.
The pledge builds on earlier moves to widen foreign participation. At the Hong Kong FIC & Bond Connect Summit in July, Pan announced a rise in the annual Southbound Bond Connect quota from 500 billion yuan to 800 billion yuan, and said China would develop bond repo business using Southbound Bond Connect bonds as collateral, according to the Hong Kong Monetary Authority. The HKMA said it was the first monetary authority to transact under a PBOC repo facility that lets foreign central banks, international financial organisations and sovereign wealth funds draw renminbi liquidity against Chinese government bonds, central bank bills and policy bank bonds, a facility Pan had unveiled at the Lujiazui Forum, according to BigGo Finance.
Friday's pledge goes further than the credit tools China has used so far this cycle, reaching into the architecture of its capital markets. It follows an easing push that included a prime rate cut and an expansion of relending in September, and credit data that beat expectations the same month, giving Beijing room to pitch market-opening measures from a position of strength rather than necessity.
If carried through, wider recognition of renminbi bonds as global collateral would deepen foreign participation in China's bond market on its own terms, separate from the yield gap that has already set the market apart from the global selloff. That would mark a structural shift beyond the rate and liquidity tools Beijing has relied on so far this cycle.