Hong Kong Exchanges and Clearing Limited (HKEX) launched a 5-year Chinese government bond (CGB) futures contract on August 3, marking a significant step forward in the development of Hong Kong's fixed income and currency (FIC) ecosystem and further bolstering the offshore renminbi market. The exchange also welcomed a series of measures announced by China Securities Regulatory Commission (CSRC) Chairman Wu Qing aimed at deepening two-way cooperation and supporting Hong Kong's development as an international financial centre.
During the listing ceremony for the CGB futures, Wu Qing outlined several initiatives, including continued support for eligible mainland enterprises to list and raise funds in Hong Kong, as well as backing for eligible Hong Kong-listed companies to conduct listings on the mainland. He also encouraged enhanced cooperation between index companies on both sides to launch more indices based on Chinese assets, deepened collaboration in the futures markets to support the introduction of more renminbi-denominated and settled futures products in Hong Kong, and promoted the launch of more Exchange Traded Fund (ETF) products that focus on both markets and are aligned with China's modern industrial system. The CSRC and the Hong Kong Securities and Futures Commission (SFC) jointly announced these measures later in the day.
The newly introduced CGB futures expand HKEX's growing suite of China-related products and complement existing connect schemes such as Bond Connect and Swap Connect. As the only offshore Chinese government bond futures contract, this product provides international investors with an effective tool for managing duration and interest rate risk associated with mainland Chinese bonds.
The listing ceremony, held at the Hong Kong Financial Hall this morning, brought together representatives from regulatory bodies, financial infrastructure institutions, market participants, and other industry stakeholders. In addition to Wu Qing, attendees included Hong Kong Financial Secretary Paul Chan Mo-po, Director of the Liaison Office of the Central People's Government in the Hong Kong SAR Zhou Ji, SFC Chairman Wong Tin-yau and CEO Julia Leung, Hong Kong Monetary Authority (HKMA) Chief Executive Eddie Yue, HKEX Chair Carlson Tong and CEO Bonnie Chan, along with other distinguished guests.
HKEX Chair Carlson Tong stated, "A thriving fixed income and currency market is crucial for Hong Kong's long-term development as an international financial centre. As global investors increase their participation in Asian bond and renminbi markets, Hong Kong will play a vital role as an open and trusted hub connecting China with the world. The launch of the 5-year CGB futures will further enrich the offshore renminbi product ecosystem, advance the internationalisation of the renminbi, and solidify Hong Kong's position as a one-stop platform for financing, trading, and risk management."
HKEX CEO Bonnie Chan commented, "We are delighted to launch the 5-year CGB futures today, marking a significant milestone in HKEX's strategy to diversify and build a multi-asset marketplace. Since the introduction of Bond Connect and Swap Connect, we have consistently expanded our derivatives, commodities, and fixed income and currency products to create a more comprehensive product ecosystem, allowing investors to allocate capital, manage risk, and seize new opportunities through our market. Looking ahead, we will continue to work closely with regulators, infrastructure partners, and market participants to expand connect schemes, increase product choice, and enhance cross-asset risk management capabilities."
ChinaBond Pricing Center Co., Ltd. has authorised HKEX to use relevant bond valuation information in the development and operation of the CGB futures and will provide price calculation services to ensure market transparency and credibility for offshore market participants.