Photo taken on Jan 14, 2021 shows a night view of Lujiazui in Pudong of east China's Shanghai Municipality. (FANG ZHE / XINHUA)

The Bond Connect has played a key role in bridging the Chinese mainland’s bond market with those of the world, contributing to the opening-up of the nation’s financial markets in the past five years, says Chief Executive John Lee Ka-chiu.

Speaking at a summit marking the fifth anniversary of the Bond Connect’s launch, he said the Chinese mainland is the world’s second-largest bond market, with northbound transactions having gone up steadily across the board

Speaking at a summit marking the fifth anniversary of the Bond Connect’s launch, he said the Chinese mainland is the world’s second-largest bond market, with northbound transactions having gone up steadily across the board. 

The Bond Connect, which was rolled out in 2017, enables investors on the mainland and overseas to trade in each other’s bond market. As of May this year, foreign institutions had held 3.7 trillion yuan ($559.1 billion) worth of Chinese bonds – more than four times the amount before the Bond Connect’s launch. The total trading volume in May rose to 675 billion yuan from 31 billion yuan in July 2017.

READ MORE: China's Bond Connect program sees robust trading in August

Lee said the Bond Connect not only reflects the special administrative region’s 25-year status as the “bridgehead” in the nation’s opening-up, it has brought mutual benefit to the mainland and Hong Kong financial markets.

Noting the goal of strengthening Hong Kong’s function as a global offshore renminbi hub as laid down in the 14th Five-Year Plan (2021-2025), Lee said the SAR has unique advantages in developing the market connect scheme, given the “one country, two systems” principle, law-based governance, a low tax structure and the city’s improved electoral system.

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As Hong Kong enters a new stage of long-term governance and prosperity, it has more solid conditions and advantages in further developing capital market connectivity between the mainland and Hong Kong, he said.

Pan Gongsheng, vice-governor of the People’s Bank of China, the central bank, lauded Hong Kong’s important role in the opening-up of the mainland’s financial markets.

In future, the central government will unswervingly open up the financial market and support the prosperity and development of Hong Kong as an international financial center, he said.

READ MORE: Bond Connect online platform 'will assist global investors'