China bond appeal rising but appetite still capped

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 this two-part article, we examine some of these issues. Foreign holdings of Chinese onshore government bonds expand…