Core Insights - The Bond Connect has achieved significant milestones in its seven years of operation, enhancing the maturity and international influence of China's bond market [1][2] - The internationalization process of China's bond market is accelerating, with foreign institutions increasing their holdings in the interbank bond market [2][3] Group 1: International Influence - The "Northbound" channel of Bond Connect has been operating smoothly since its launch on July 3, 2017, with a transaction volume of 979.2 billion yuan in May 2023 and an average daily transaction of 46.6 billion yuan [1] - As of the end of May 2023, there are 821 investors participating through the "Northbound" channel [1] - The "Southbound" channel was launched on September 24, 2021, and has seen rapid growth, with 865 bonds under custody and a balance of 442.02 billion yuan as of the end of May 2023 [1] Group 2: Market Participation - As of the end of May 2023, foreign institutions held 4.22 trillion yuan in the interbank bond market, accounting for approximately 3.0% of the total custody volume, with continuous increases over the past nine months [2] - The Bond Connect has facilitated the inclusion of Chinese bonds in major global bond indices, further enhancing the market's international standing [1] Group 3: Derivative Tools and Policy Support - The Bond Connect has seen ongoing optimization, making it a key channel for foreign investors in China's bond market, with increasing trading activity [3] - The launch of the "Swap Connect" in May 2023 aims to address the demand for risk hedging strategies for cross-border investments, with new standardized interest rate swap contracts introduced [3] - The People's Bank of China is expected to accelerate the introduction of related policies to enhance the Bond Connect and Swap Connect, providing more financial tools for foreign investors [4]