The launch of Hong Kong’s Swap Connect programme, giving global investors easy access to China’s $5tn swap market, is facing delays, according to people familiar with the situation, with regulators in Beijing failing to finalise rules necessary for the trading scheme’s operation.The Swap Connect, announced during Chinese president Xi Jinping’s high-profile visit to the city in July, has been positioned by officials as an important new channel for the further opening up of China’s vast onshore markets. The move was also celebrated as a boon for Hong Kong, where Covid-19 restrictions have throttled the economy and undermined the financial sector’s competitiveness.
The programme, however, will probably miss its target launch window of early January, two people familiar with the matter said, since regulators in Beijing have yet to publish even basic information on the final rules for the programme, nearly five months after its unveiling.
“There’s a lot of interest from financial institutions, but no one has seen any details,” said the head of one industry organisation in Hong Kong, who added that regulators in the city and mainland China would need to work through a number of pressing questions before any rules could be published.