China opening up bond market, but currency seen as big barrier

Hong Kong

CHINA'S policymakers plan to open the doors wider than ever to foreign investment in the country's US$3 trillion bond market, in part to help shore up the struggling yuan. But the currency is also proving to be a major barrier to the success of their plan.

Foreigners own less than 2 per cent of China's US$3.3 trillion in outstanding bonds and say getting their cash out of China and recent weakness of the closely controlled currency are obstacles to investment.