Background:

At MarketAxess, I wrote an article as part of a go-to-market campaign for MarketAxess' re-entry into the Chinese onshore bond market. This piece kicks off a year-long strategic campaign, including a partnership with the International Capital Market Association (ICMA), an email campaign, and a WeChat social campaign.

Format: 

Blog article, email copy

Published 13 March 2024 here

Navigating the new era of China's bond market

The Chinese bond market has historically been one of internationalization and growth–and its evolution is a testament to the country's remarkable economic transformation. That said, the landscape is continuously shifting, presenting both challenges and opportunities as it becomes more intertwined with global markets.

Today, amidst a global economic recalibration, the country’s economic policies and the influence of global macroeconomic factors are shaping the market's trajectory—elements that are expected to significantly influence market behavior and investment strategies.

Despite the complex environment that has become commonplace for the Chinese bond market, the adoption of electronic trading has been on an upward trend, as evidenced by a 24% increase in yearly trading volume via platforms like Bond Connect in 2023. This growth is not just a response to market demands but also a reflection of the market's commitment to embracing electronic transformation. 

As a one-stop Emerging Market bond trading platform, MarketAxess has established a strong trading connection with the China Foreign Exchange Trading System (CFETS) to provide offshore investors with direct access to China's onshore bond market. This interconnection of domestic and foreign trading systems is enabling foreign investors to participate in the Chinese domestic interbank bond market directly via their MarketAxess workstation or OMS.

Access to new liquidity sources is arguably the biggest benefit of going electronic, particularly during periods of volatility. As the preference for global allocation increasingly grows among investors in the Asia-Pacific region, the ability to tap on the liquidity of global bonds and smoothly execute transactions becomes a major factor in their trading strategies. That is why technological innovations such as MarketAxess’ Open Trading®, a multi-award winning all-to-all marketplace, have become more crucial than ever. Such advancements have become essential for creating a more interconnected market where stakeholders can engage effectively and in a cost-efficient way.

Access to pre-trade data and the use of automation tools are also becoming increasingly important in Asian fixed income trading. Rather than relying on indicative data and traditional voice trading, innovative data and automation tools are empowering traders to make better decisions that are driven by real-time, actionable data, and to trade more adaptively and efficiently. This is best reflected in the growing adoption of MarketAxess’ Auto-X™ Request-for-Quote (RFQ), our tool for automated, low-touch liquidity acquisition. Leveraging our AI-powered pricing engine, CP+™, Auto-X RFQ saw a 38% increase in yearly trading volume traded by asset managers globally in 2023; in Asia, trades using Auto-X RFQ constituted 15% of all trades, up from 6% in 2022.

The market is also turning its focus to green bonds in a bid to sustain innovation and meet the flourishing demand for sustainable investment options. Initiatives, like our 'Trading for Trees' incentive program, has become a beacon for how electronic trading platforms can help investors align with global sustainability goals. Since inception, thanks to the volume of green bonds traded on our platform, we have been able to plant over one million trees globally. See the results for 2023 in this infographic.

As we gear up for ICMA’s China Bond Market Forum on March 20th in Beijing, we’re excited to delve into these developments and discuss in more depth how technology innovations and data can unlock new opportunities for global markets. The forum will bring together government officials, regulators, issuers, investors, and other market participants to dissect these trends, understand the impact of regulatory reforms, and explore fintech advancements that are set to redefine the future of bond trading in China. 

If you share our passion for staying at the forefront of market trends and innovations, I encourage you to register for the forum. I look forward to seeing you there! 

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Subject: Navigating the next era of China's bond market

Preheader: Join us in Beijing

How is electronification transforming the Chinese bond market?

As China's bond market becomes more intertwined with global markets, the country’s economic policies and the influence of global macroeconomic factors are shaping the market's trajectory.

In our latest article, Cathy Cai, Senior Sales Relationship Manager at MarketAxess Hong Kong, discusses the latest trends in the Chinese bond market and how technology is driving greater interconnectivity and efficiency in its market.

As a supporting partner of ICMA's upcoming China Bond Market Forum on March 20th, we will be delving further into these developments and explore how technology innovations and data can unlock new opportunities for global markets.

We look forward to seeing you at the forum!

READ THE ARTICLE → REGISTER FOR THE FORUM →