Bloomberg hosted its signature investor roadshow themed “Navigate the New Silk Road” in London yesterday with 200 investors, government officials and market professionals from China and the UK in attendance.
In its seventh year, this year’s roadshow focused on key developments and investment opportunities in China’s rapidly liberalising interbank bond market and what’s next. Liu Xiaoming, China’s Ambassador to the UK and John Glen, MP, Economic Secretary to the Treasury and City Minister of UK delivered keynote speeches.
“In my nearly ten years as Ambassador to the United Kingdom I have witnessed with my own eyes the growth of China-UK co-operation on the Belt and Road Initiative, which is reflected, among others, in Britain being the first to sign the Guiding Principles on Financing the Development of the Belt and Road, and the first to appoint a special envoy and set up an expert board for the Belt and Road Initiative,” Chinese ambassador Liu Xiaoming said in his keynote speech.
“As the Belt and Road Initiative starts a new journey, its high-quality development will create more opportunities for deeper China-UK collaboration on international standard-setting, green finance, risk management and in third markets and this would ensure wider, higher and deeper development of the China-UK Golden-Era.”
“Britain, as a quintessential modern trading nation, is instinctively attuned to the commercial and developmental opportunities of the new Silk Road. We believe that fair, open and sustainable economic cooperation can deliver benefits for all; not just in central Asia, but far beyond, and our ability to support infrastructure financing, particularly through private capital, can help turn the ambition into a reality,” said John Glen MP.
“The UK has been at the forefront of supporting Chinese efforts to open their markets over many years, and it shows. London is the leading RMB trading and investment centre outside of China. Our deep-rooted strengths also have the potential to accelerate the development of China’s own bond market.”
Currently at $13 trillion, China’s bond market has seen growing foreign participation with new regulatory developments, enhanced market access and the inclusion of Chinese government and policy bonds into the Bloomberg Barclays Global Aggregate Index. According to data compiled by Bloomberg, foreign holdings of Chinese onshore bonds reached 1.88 trillion yuan (about 217 billion pounds) as of May 2019 and foreign investors purchased at least 109.3 billion yuan (about 12.7 billion pounds) of Chinese bonds in May, a record high in the past year.
Jin Mei, Chief Representative of the People’s Bank of China’s Representative Office for Europe, shared major developments in China’s financial market, and the progress in China’s interbank bond market. Speakers from CFETS, Bond Connect Company Limited (BCCL), Bank of China, E-Fund, HSBC, ICBC Standard, Insight Investment, State Street Global Advisors and Bloomberg discussed key opportunities and the outlook of China’s bond market, following the April inclusion of Chinese bonds into the Bloomberg Barclays Global Aggregate Index.
When fully weighted 16 months from today, China will be approximately 6% of the Global Aggregate Index. At the panel discussions, global investors expressed keen interest in China’s bond market and shared concerns on market liquidity, taxation, trading hours and other operational issues. Speakers from CFETS, BCCL and Chinese institutions discussed possible measures to address investor concerns.
The largest offshore RMB market outside Asia, London is the fourth stop of this year’s “Navigate the New Silk Road” event series following Hong Kong, Singapore and Tokyo.
The roadshow will be held in other key financial centres around the world, providing a platform to connect Chinese financial institutions with international investors and help global investors better understand investing opportunities in China.