On August 3, the 5-year Chinese government bond futures officially began trading on the Hong Kong Exchanges and Clearing Limited. According to Wind data, as of the close on August 3, the HKEX 5-year Chinese government bond futures contract for September 2026 settled at 107.640 yuan, with a volume of 3,440 lots traded, while the December 2026 contract settled at 107.635 yuan, with a volume of 315 lots.
Key features of the 5-year Chinese government bond futures contract include: it is the only Chinese government bond futures product listed on the offshore market; it serves as a standardized renminbi interest rate risk management tool and a vehicle for foreign investors to invest in renminbi bonds; the contract is traded and settled in renminbi; it is cash-settled, with the price determined based on a basket of Chinese government bonds; and the contract can be traded on Hong Kong public holidays. HKEX Chairman Charles Li stated: "As international investors increase their participation in Asian bond and renminbi markets, Hong Kong, as an open and trusted hub connecting China with the world, will play a vital role. The launch of the 5-year Chinese government bond futures will further enrich the offshore renminbi product ecosystem, promote renminbi internationalization, and consolidate Hong Kong's position as a one-stop platform for financing, trading, and risk management."
The launch is designed to meet the needs of both domestic and overseas markets. In recent years, global investors have seen a growing demand for long-term holdings of renminbi assets. The Bond Connect program, launched in 2017, allowed foreign investors to participate in the mainland bond market via the northbound link, and the subsequent launch of the southbound link enabled two-way trading. By the end of June, the size of Chinese bonds held through Bond Connect exceeded 3 trillion yuan. Three years ago, the Interest Rate Swap Connect was launched, allowing investors to hedge interest rate risk on their Chinese government bond holdings. The introduction of the 5-year government bond futures on HKEX now provides a standardized, exchange-traded offshore hedging tool for government bonds.
Regarding the introduction of the 5-year Chinese government bond futures in Hong Kong, HKEX Senior Vice President of Fixed Income and Currency Product Development, Chow Siu-ping, explained: "We observed that the 5-year tenor is a common starting point in the Chinese government bond market and is a key maturity on the yield curve. Additionally, the average remaining maturity of dim sum bonds in the offshore renminbi bond market is about 5 years. Considering the actual development needs of both the onshore bond market and the offshore renminbi bond market, the 5-year contract is more suitable, as it can meet the needs of both domestic and overseas markets."
In terms of trading hours, the offshore government bond futures trade from 9:30 to 16:30 Hong Kong time, use cash settlement, and can continue trading on most Hong Kong public holidays, allowing investors in different regions to manage renminbi interest rate risk more flexibly. Several foreign institutions have stated that as international investors' demand for allocation to China's bond market increases, so does their need for related hedging tools, making the launch of the 5-year Chinese government bond futures by HKEX timely.
"Standard Chartered's foreign institutional clients have shown a marked increase in interest in Chinese government bond futures products in recent years, reflecting the growing demand and willingness of international investors to allocate to China's bond market," said Mary Huen, CEO of Standard Chartered Hong Kong and Greater China and North Asia. "As the weight of Chinese government bonds in global portfolios grows, investors need to manage duration and positions, and the demand for related hedging tools is also increasing. HSBC actively supports market development and was the first to complete a trade on the launch day of the 5-year Chinese government bond futures, which helps drive initial turnover and establish a pricing reference, and in the long term, encourages more investors to participate in the contract," said David Wong, Head of Global Markets, Fixed Income, Currencies and Commodities, Asia Pacific, and Head of Hong Kong Capital Markets and Securities Services, HSBC.
Simultaneously with the launch of the 5-year Chinese government bond futures, market makers ensured market liquidity. According to HKEX, 13 liquidity providers engaged in two-way quote operations during the session, providing liquidity support. On the first day of trading, these institutions successfully launched their quote services and completed multi-account hedging transactions. For example, Standard Chartered introduced: "We participated in market-making, two-way quote operations, and providing liquidity support for the product launch, and have successfully completed the first batch of 5-year Chinese government bond futures trades for several foreign institutional clients."
The launch of the 5-year Chinese government bond futures will help improve the completeness of the offshore renminbi risk management toolkit. HKEX Fixed Income and Currency Product Development Head Fan Wenchao noted: "After the successful launch of the 5-year government bond futures, we will continue to communicate with regulators on both sides to study the introduction of other internationally mainstream tenor products based on market conditions."