BNP Paribas has been named a market maker for the southbound leg of the Bond Connect scheme, which officially launches on September 24 in Hong Kong. The southbound leg of the scheme simplifies access to Hong Kong’s bond market for mainland Chinese investors.

Since the launch of the scheme’s northbound route in July 2017, China’s bond market has overtaken Japan as the world’s second largest behind that of the United States. Foreign participation in China’s domestic market has more than doubled during this period, alongside the inclusion of Chinese bonds in major global indices.

“The launch of Southbound Connect demonstrates China’s commitment to an orderly opening of its outbound investment markets and gives confidence that further internationalization should soon follow,” says Richard Cohen, head of primary & credit markets at BNP Paribas.

George Sun, head of the bank’s global markets for Greater China, adds: “BNP Paribas has been one of the most active international banks acting as market maker in the Northbound Bond Connect and Direct CIBM programmes, and now we are pleased to be among the first batch of market makers in Southbound Bond Connect.”

The Bond Connect scheme complements the existing Qualified Domestic Institutional Investor (QDII) system that governs Chinese overseas investments.