2016 was a landmark year for China's financial reform. After the IMF's decision to include the renminbi in the Special Drawing Rights (SDR) basket, PRC policy makers took another major step to internationalize the currency and liberalize capital market access by further opening up the $8 trillion renminbi interbank bond market to offshore investors.

Nearly all types of foreign institutional investors are now qualified to access the domestic bond market. The People's Bank of China (PBOC) has also abolished investment quota controls and simplified the application procedure to record filing.

Bond market opening: A quick timeline

The opening up of the interbank bond market for foreign institutional investors can be summarized by the following regulatory moves by the PRC authorities:
- 2010: The PBOC launched a pilot scheme to allow foreign central banks, monetary authorities, renminbi clearing banks in Hong Kong and Macao, and offshore banks participating in cross-border trade renminbi settlement to invest in the onshore interbank bond market (limited to cash bonds only).

- 2012: The interbank bond market was opened to foreign insurance companies in Hong Kong, Singapore and Taiwan.

- 2013: Qualified foreign institutional investors (QFIIs) and renminbi qualified foreign institutional investors (RQFIIs) were allowed to access and invest in the interbank bond market within an approved quota (limited to fixed income bonds only). All trading was to occur through the China Foreign Exchange Trade System and National Inter-bank Funding Center (CFETS), which is the trading execution facility for the bond market.