China has launched a bond-market-connect scheme with Brazil, Chinese media outlets reported this week, marking the first such link among emerging markets.
Schemes such as this one,
often dubbed “connects” between Chinese bond or stock markets and their offshore counterparts, typically allow investors to bypass special permits or capital-flow controls when trading on either side’s exchanges.
China now maintains at least five offshore capital-market “connect” schemes on three continents.
Hong Kong: The Global Gateway
The Hong Kong stock exchange set up China’s best-known connect scheme with the bourses in Shanghai and Shenzhen in 2014, followed by a cross-border bond connect in 2017.
As the primary conduit for international capital entering mainland China, Hong Kong is the nation’s leading financial intermediary with global capital markets.
Last year, the connect scheme’s average daily turnover reaching mainland stock markets was 212.4 billion yuan (US$31 billion), while HK$121.1 billion (US$15.5 billion) flowed the other way – double the 2024 amount.
On the bond side in March, the average daily turnover from transactions into the mainland hit a record high 55.6 billion yuan. Transactions worth a total 820.8 billion yuan were made going the other way last month. Quotas still apply on the inbound mainland side.
Singapore: The Southeast Asian Bridge
Stock exchanges from Shanghai and Singapore launched the Shanghai-Singapore ETF (exchange-traded fund) Connectivity scheme in 2023, and as of last year, five specific products had been listed on the two bourses.
The link allows authorised asset managers to cross-list in the scheme – a move aimed at facilitating Chinese investment in the 11-country Association of Southeast Asian Nations (Asean) bloc.