International investors will be able to tap China’s $3.1 trillion swaps market for the first time through a link with Hong Kong announced on Monday, as Beijing intensifies its efforts to modernise its domestic capital markets, reports the Financial Times.
The arrangement, which was announced on the same day as an expanded currency swap between China’s central bank and Hong Kong’s monetary authority, followed the 25th anniversary of the territory’s return from Britain and a rare visit from Chinese leader Xi Jinping.
The project builds on Xi’s promise of support for Hong Kong to “maintain its unique position and advantages,” and to bolster its status as “an international financial and trading hub.” Authorities in China have been encouraging the development of a bigger and more efficient derivatives market as its own domestic economy becomes the second largest in the world.
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