Chinese government bond futures began trading in Hong Kong on Monday, marking authorities' third attempt to further open up the country's debt market. International asset managers, pension funds and insurance companies have shown strong interest in offshore China government bond futures, which will have a size of 500,000 yuan (US$74,051).

HKEX has set a low minimum margin ratio, requiring only 7,980 yuan to trade one contract, making it accessible for investors. Kevin Fan, HKEX's head of fixed income and currency product development, noted that many international institutional investors have been actively trading in the Chinese onshore bond market, which reached 200 trillion yuan as of June, making it the world's second largest after the US.

The new futures will be the first offshore products allowing investors to manage risks in their Chinese treasury-bond investments at a low cost. Foreign investors held 3.2 trillion yuan of onshore Chinese bonds at the end of March, accounting for 1.6 per cent of the total.

HKEX's offshore sovereign bond futures will allow international investors without QFII quotas to trade the contracts in Hong Kong, either to hedge risks or as an investment.