China Opens Exchange Bond Markets to Overseas Investors

China will allow foreign institutional investors to trade bonds on its smaller exchange market in its latest step to attract more capital inflows by opening its financial markets, after a record selloff of Chinese holdings by foreign investors.

Qualified foreign institutional investors, which can include central banks, sovereign funds, commercial banks and pension funds, will be allowed to invest in bonds on the exchange market, the People’s Bank of China (PBOC) said in a statement published on its website. The move would “help expand capital inflows to China,” it added.

Financial institutions can trade bonds and invest in derivatives as ...