File Photo: CFP

Chinese bond market officials announced on Tuesday that they will extend trading hours for interbank markets by three hours, as part of an effort to make it easier for global investors to participate in the country's bond market as global demand for Chinese bonds is on a steady rise.

Starting September 21, trading of bonds settled the next day or after will be extended to 8:00 pm Beijing time from the current closing time of 5:00 pm, according to a statement from the National Interbank Funding Center (NIFC), and two other clearing authorities.

The move is aimed at pushing forward the opening and development of China's interbank bond market and make it more convenient for domestic and foreign investors to trade, the statement said.

The new closing time will give investors in Europe more hours to trade, as 8 pm in Beijing is 1 pm in London and 2 PM in Frankfurt - the two main European financial markets. The new trading hours would also make it easier for US investors, as the close of trading will be 8 am in New York. 

The upcoming change comes as China continues to open up its domestic capital market, in the face of the COVID-19 pandemic and an increasingly hostile US government, and as foreign investors' appetite for Chinese financial assets is growing rapidly. The size of China's bond market is estimated at more than $15 trillion.

Bond trading is a way of making a profit from fluctuations in the value of corporate or government bonds.

In August, foreign investors raised their holdings of China bonds for a 21st consecutive month, with total holdings reaching 2.46 trillion yuan ($360.45 billion), increasing 42.8 percent year-on-year, according to data released by the China Central Depository and Clearing Co. on September 3.

The NIFC's statement said more arrangements would be made to improve efficiency and quality of services for domestic and foreign investors.