NextFin News — Hong Kong Futures Exchange began trading five-year China Government Bond futures on August 3, marking the world’s first offshore futures contract on Chinese sovereign debt.
The cash-settled renminbi-denominated contracts track onshore five-year Ministry of Finance bonds with a 3 percent coupon and a notional value of 500,000 yuan. Trading runs from 9:30 a.m. to 4:30 p.m. Hong Kong time, including most public holidays, and the contracts settle against the nearest two quarterly months. HKEX and the Securities and Futures Commission selected the five-year tenor after assessing market demand and the average residual maturity of offshore dim-sum bonds; a ten-year contract remains under consideration for a later stage. Liquidity providers including HSBC, Standard Chartered and Bank of China (Hong Kong) completed multiple trades on the opening day, supported by a 50 percent trading-fee discount through July 2027.
The product complements Bond Connect and Swap Connect, giving international holders of more than 3 trillion yuan in Chinese government bonds a standardized, exchange-traded hedge for interest-rate risk without onshore regulatory barriers. Financial Secretary Paul Chan and China Securities Regulatory Commission Chairman Wu Qing attended the launch ceremony, describing the contract as a key building block in Hong Kong’s offshore renminbi ecosystem and a catalyst for deeper two-way capital flows.
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