According to the report of China Knowledge, during the State Council Meeting presided by Premier Li Keqiang on Aug 31, 2018 , the cabinet has announced its plans to exempt interest gains on onshore bond by foreign institutions from corporate income tax and value-added tax in coming three years.
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Open up bond market and increased foreign investment
Amidst trade disputes with the U.S.,the Chinese government is putting in greater effort to open up its bond market and increased foreign investment, in an attempt to boost its financial market.
Onshore bonds
To date China’s total onshore bond market has reached almost USD 12 trillion, and foreign buying is on strong momentum since several schemes were introduced by the Chinese government to allow foreign participation.
The China Hong Kong Bond Connect introduced last year is new channel for foreign institutional investors to buy into onshore bonds which average USD 1 billion a day.
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