China takes fresh steps to open $20 trillion bond market to foreigners

China took fresh steps on Friday to facilitate foreign investment in its $20 trillion bond market, saying it would cut service fees, improve overseas access to foreign exchange hedging, and streamline the process of opening accounts.

China will also facilitate cross-border bond subscriptions, and make it easier for foreign passive funds to trade Chinese bonds, the China Foreign Exchange Trade System (CFETS), affiliated to China's central bank, said in a statement.

Overseas investors reduced holdings of Chinese bonds for a fourth consecutive month in May, as diverging monetary policies kept Chinese yields pinned below their US counterparts.

The move is