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China’s great bond market opening leap forward

Beijing regulators are leaning into a seven-week rally in China’s sovereign bond market by widening access to onshore interest-rate swaps. Yet what sounds like a rather technical turn of the screw is a huge and timely reform win for institutional investors keen on trading Asia’s biggest economy.

“Timely,” because it coincides with Group of Seven (G7) members heading to Hiroshima, Japan to contain any number of financial troubles. They include runaway inflation, failing Western banks, the specter of a US default and desperate attempts to woo Global South countries.

In China, though, the vibe is more about opening a recovering financial system to global investors hungry for growth and higher-yielding assets as the post-Covid-19 trade gains momentum.

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