Chinese financial markets and specially bond markets are facing big changes ahead. It is expected that over 100 billion dollars of new foreign investments will flow into the Chinese debt markets yearly due to the market liberalization.
One can say that the Big Bang started today when Bloomberg announced that they will include the China Goverment bonds into the Bloomberg Barclays Global Aggregate index, starting from today. This means that renminbi will be the 4.th largest currency in the index. It is also expected that JP Morgan and FTSE will do the same index-changes during this year.
According to several market analysts and strategist, these changes will bring more than 100 billion dollars to the Chinese bond markets yearly and thus help to keep the demand for yuan-related financial products high. This will also help the overall economy growth and trade balance. Also the number of international investors have already shown increase and the overall interest and knowledge of the markets will rise.
Chinese bond markets are the third largest in the world with over 13 trillion dollars, after the US and Japan.