China's central bank said on Tuesday more mainland-based institutions would be allowed to invest offshore through the Bond Connect scheme, with authorities planning to open it up to non-banking investors.

The scheme enables onshore investors to access Hong Kong's bond market. Currently, financial institutions not in the banking sector are excluded from the southbound leg of the trading link.

Speaking at the Bond Connect Anniversary Summit 2025, Jiang Huifen, deputy director-general of the financial market department at the People's Bank of China, said the scheme was expanded to also cover brokerages, insurers, mutual funds and wealth managers.

The move will provide wider access for onshore investors to international bonds traded in Hong Kong, including offshore yuan- and US dollar-denominated debt.

According to Jiang, the quota under the Swap Connect scheme, which allows global investors to trade and clear onshore yuan interest-rate swaps, will also be increased.

She added that China's bond market was growing following the emergence of the global tariff war, with domestic bonds held by overseas investors rising by nearly 200 billion yuan from about 4 trillion yuan at the start of the year.

"We are actively studying other measures to promote the opening up of the bond market," she told participants in a video speech. "We will also enhance the facilitation level of cross-border investment and financing, promote the establishment of a one-stop account opening platform for overseas investors."

Analysts believe the move by the central bank reflected Beijing’s wider efforts to open up its financial system, improve two-way capital flows by loosening restrictions on financial flows, and enhance the global appeal of the yuan.

Bonnie Chan, chief executive of Hong Kong Exchanges and Clearing, said China's bond market, already the second largest in the world, had room for growth with international investors accounting for only 3 percent of the total.

"We don't expect international investors to maintain such a small exposure indefinitely. There is a huge amount of room for growth," she told event participants.

"With global investors increasingly seeking diversification, there is a huge opportunity for that growth to happen in the coming years.

"And with unique connect channels such as Bond Connect, this is where global investors will get the best access to China's growth opportunities."

Eddie Yue, chief executive of Hong Kong Monetary Authority, also hailed the expansion of the southbound Bond Connect scheme.

"This will open up more channels to meet the growing demand from mainland investors, addressing their needs for diversified asset allocation," he said.

"It will also bolster the development of Hong Kong's bond market by widening the investor base and enhancing market liquidity,hence increasing Hong Kong's attractiveness to both bond issuers and global investors."