FTSE Russell will not include China in its flagship government bond index, citing market liquidity and foreign exchange concerns in the country’s $5tn government debt market.
The index provider, which released the results of its annual fixed income country classification review on Thursday in New York, said measures taken by Beijing to improve foreign investor access to its government bonds “mark significant progress” towards China achieving inclusion in FTSE Russell’s flagship World Government Bond index.
But it noted that index users “have provided feedback that they would like to observe further improvements to secondary market liquidity, and increased flexibility in [foreign exchange] execution and the settlement of transactions”.