Shanahai readies free-zone issues

摘要

China is drawing up a pilot scheme to give foreign investors easier access to renminbi-denominated bonds in the Shanghai Free Trade Zone as soon as this month. The initiative will allow foreign investors to clear and settle the bonds using an international central securities depository account with a link to the Shanghai Clearing House. Many observers see the move as the first step to link the broader onshore bond market to offshore investors. However, market participants are also raising questions about the need for such a middle-ground market between the existing offshore Dim Sum market and the massive onshore bond market, predicting that FTZ bond activity will be limited by a number of barriers.