China’s Southbound Bond Connect quota raised 60% to 800 billion yuan on fifth anniversary
On September 24, 2026, the Bond Connect Southbound scheme marked its fifth anniversary. The People's Bank of China raised the annual net investment quota from 500 billion to 800 billion yuan, included Southbound bonds in repo support, and expanded eligible products to Hong Kong dollar bonds and Macau's bond market. Direct custody balances reached approximately 957.3 billion yuan by July 2026, with first-quarter 2026 trading volume at 208.2 billion yuan. Non-bank investors including insurers and funds joined, and the offshore dim sum bond market saw 1.1 trillion yuan in 2025 issuance.
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Bond Connect Southbound Marks Fifth Anniversary as China's Bond Market Deepens Cross-Border Links
On September 24, 2026, the Bond Connect 'Southbound' scheme marked its fifth anniversary, having evolved from a capital channel into an ecosystem hub for cross-border bond investment. According to CITIC Securities data compiled from Shanghai Clearing House, the direct custody balance under Southbound Connect reached approximately 957.3 billion yuan by July 2026, up 232.9 billion yuan from end-2025. The Hong Kong Monetary Authority reported first-quarter 2026 trading volume of 208.2 billion yuan, equivalent to about 40% of the previous annual quota. Key developments include the PBOC's recent expansion of the annual net investment quota from 500 billion to 800 billion yuan, inclusion of Southbound bonds in repo support, and extension to Hong Kong dollar bonds and Macau's bond market. Deutsche Bank China Vice Chairman Xu Zhaoting noted that sustained capital inflows have improved offshore market liquidity and pricing benchmarks. Invesco's Lam Chun Fai highlighted that repo market infrastructure enhancements will boost liquidity. Bloomberg's Wang Dahai said the expansion will deepen offshore RMB bond market depth. Looking ahead, the '15th Five-Year Plan' and Hong Kong's first five-year plan both emphasize developing the offshore RMB market, with Hong Kong Chief Executive John Lee pledging further optimization of the bond market and Southbound Connect.
Read sourceBond Connect Southbound Marks Fifth Anniversary as China's Bond Market Deepens Cross-Border Links
The Bond Connect 'Southbound' scheme, launched on September 24, 2021, celebrated its fifth anniversary, marking a milestone in China's financial market opening. Data shows the scheme's scale has grown to approximately 957.3 billion yuan in direct custody balances as of July 2026, with first-quarter 2026 trading volume reaching 208.2 billion yuan. Deutsche Bank's Xu Zhaoting noted that the scheme has transformed the offshore renminbi bond market by improving liquidity, diversifying investor bases (including domestic banks, brokerages, wealth management firms, funds, and insurers), and establishing a stable yield curve. Recent policy upgrades include raising the annual net investment quota from 500 billion to 800 billion yuan, expanding eligible products to Hong Kong dollar bonds and RMB-related products, and including bonds in repo support. Analysts from CITIC Securities, Penghua, and Bloomberg expect the scheme to evolve from a capital channel into an 'ecological hub' supporting RMB internationalization, with further optimization in investment scale, investor scope, and product offerings under the 15th Five-Year Plan and Hong Kong's first five-year plan.
Read sourceChina's Southbound Bond Connect Expands to Boost Deeper Market Interconnection
China's 'Southbound Bond Connect' program is undergoing significant expansion, moving from a single-channel for offshore yuan bonds to a comprehensive multi-currency fixed-income platform. Key measures include incorporating 'Southbound Connect' bonds into the repo collateral pool, expanding eligible products to Hong Kong dollar bonds and renminbi-related products, and extending coverage to the Macau bond market. Hong Kong Monetary Authority (HKMA) Chief Executive Eddie Yue revealed that the HKMA will further optimize market maker management for the scheme this year. Analysts, including Xu Zhaoting, believe these upgrades will better meet domestic institutions' demand for global asset diversification and strengthen Hong Kong's offshore fixed-income infrastructure. Lin Chunhui of Invesco noted that improved repo market infrastructure will enhance liquidity and attract mainland investors. Wang Dahai of Bloomberg expects the expansion to deepen the offshore yuan bond market. Looking ahead, the 15th Five-Year Plan and Hong Kong's first five-year plan support the development of the offshore yuan market. CITIC Securities' Chief Economist Ming Ming forecasts significant growth in overseas asset allocation demand. The program is expected to evolve from a capital channel into an 'ecological hub' supporting yuan internationalization.
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Bond Connect Southbound Turns Five: Quota Raised, Repo Added, Non-Bank Investors Join
The Bond Connect 'Southbound' scheme marked its fifth anniversary on September 24, 2025, with significant expansions announced in July 2025 by PBOC Governor Pan Gongsheng. The annual net investment quota was raised 60% from 5000 billion to 8000 billion yuan, and bonds were included in the repo facility. Investment products now cover Hong Kong dollar bonds and RMB-related products, with policy influence extending to the Macau bond market. The investor base was expanded to include non-bank institutions such as public funds, securities firms, insurance companies, and wealth management firms. Data from Shanghai Clearing House showed 1053 bonds outstanding with a balance of 6553.1 billion yuan as of November 2025, while Shenwan Hongyuan Securities reported direct custody scale near 8000 billion yuan by March 2026. Analysts from CITIC Securities and Invesco noted that the expansion improves asset allocation options, liquidity, and supports RMB internationalization. Insurance funds, including China Life and Ping An, executed their first Southbound trades in June 2025. The offshore dim sum bond market grew rapidly, with issuance reaching 1.1 trillion yuan in 2025 and outstanding balance exceeding 1.6 trillion yuan, up 74% in two years. Experts suggest further improvements in risk-hedging tools and regulatory alignment to convert quota increases into actual investment flows.
Bond Connect Southbound Marks Five Years: From Channel to Hub, Cross-Border Mechanism Deepens
The Bond Connect 'Southbound' scheme celebrated its fifth anniversary on September 24, 2026, marking a significant evolution from a simple investment channel to a deeper cross-border financial hub. Since its launch in 2021, the program has seen continuous expansion in participant types, investment quotas, and eligible assets. In July 2025, the People's Bank of China announced major enhancements, including raising the annual net investment quota from 500 billion yuan to 800 billion yuan, incorporating Southbound bonds into the repo facility, and expanding eligible products to include Hong Kong dollar bonds and RMB-related products. Data from Shanghai Clearing House shows over 1,053 bonds with a balance of 655.31 billion yuan as of November 2025, while direct custody holdings neared 800 billion yuan by March 2026. Analysts from CITIC Securities and others note that the expansion addresses investor demand for offshore bond allocation amid low onshore yields and supports the growth of the offshore renminbi (dim sum) bond market, which saw issuance of 1.1 trillion yuan in 2025. Experts from Pengbo, Invesco, and others highlight that further improvements in risk-hedging tools, disclosure rules, and market ecosystem are needed to fully realize the scheme's potential in boosting Hong Kong's role as an international bond hub and advancing RMB internationalization.
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