The central government unveiled a raft of new measures to consolidate and develop the Hong Kong Special Administrative Region into an international financial center, including increasing the annual investment quota for the southbound Bond Connect from 500 billion yuan ($73.5 billion) to 800 billion yuan and considering issuing central bank bills in the SAR on a regular basis.
The new measures aim to deepen financial cooperation between Hong Kong and the Chinese mainland, as well as support the development of Hong Kong's fixed income and currency (FIC) market and offshore renminbi business.
"Regarding further enhancing and expanding the southbound Bond Connect, new measures will be introduced, such as increasing the annual investment quota, developing the bond repurchase (repo) business using southbound Bond Connect bonds as collateral, expanding the product scope to cover products with Hong Kong dollar bonds and renminbi-denominated bonds as underlying assets, connecting to the Macao bond market, and enhancing the management of southbound Bond Connect market makers," People's Bank of China Governor Pan Gongsheng told the Hong Kong Fixed Income and Currency &Bond Connect Summit in Hong Kong on Tuesday.
