Rising appeal of China bonds has its limits

Foreign buying of Chinese onshore bonds, principally government bonds, has risen sharply in the last two months thanks to the renminbi's more stable performance and the opening of Bond Connect on July 3.

But it's still at very low levels, given the $9 trillion-plus size of the market - and will remain so until a variety of functional shortcomings are addressed. In a two-part article, FinanceAsia's sister title AsianInvestor is examining some of these issues.

Foreign holdings of Chinese onshore government bonds expanded by 8.4% in July to Rmb486.8 billion $72 billion, after a 4.7% increase in June, China Central Depository and Clearing...