‘Two sessions’ 2022: Hong Kong can offer a hub for trading Chinese offshore bonds to organise market’s ‘pervasive’ chaos, Charles Li says
- The ex-HKEX chief proposes to build an innovative bond market in Hong Kong that can address concerns of offshore investors
- An over-the-counter (OTC) market can ensure the transparency and timeliness of disclosures by issuers, Charles Li said
Hong Kong can offer a hub for offshore Chinese bonds, helping to establish a market place for transacting the debt issued by the nation’s corporate borrowers, the city’s former stock exchange chief said in his submission to China’s legislature.
An over-the-counter (OTC) market can ensure the transparency and timeliness of disclosures by issuers, where the requirements of Hong Kong and mainland China regulators can be consolidated to bring order to the “pervasive” chaos of the current system, according to the Securities Times newspaper, citing a proposal by Charles Li Xiaojia to the Chinese People’s Political Consultative Conference (CPPCC).
“It can start with Chinese-issued dollar bonds, gradually expanding to other Asian bonds, and form a [new regional] bond-trading centre,” said Li, the chief executive of Hong Kong’s stock exchange from 2010 to 2021. Such a market has strategic meaning for the internationalisation of China’s bond market, he said in his submission as a delegate to the Chinese legislature’s advisory body.
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HKEX chief executive Charles Li Xiaojia unveils three-year plan
China launched the southbound leg of the so-called Bond Connect investment channel last September, allowing onshore Chinese investors to invest in the offshore bond market. The daily quota was set at 20 billion yuan and the annual quota at 500 billion yuan (US$79.2 billion).