An independent regional trade group anticipated holdings of onshore bonds by overseas investors to go up to 10 percent in the coming years, after Beijing further expanded the Bond Connect scheme to encourage capital flow.

Under the expansion, four types of mainland-based financial institutions – brokerages, insurers mutual funds, and wealth managers – that were previously excluded will be allowed to utilise the southbound leg of the trading link to access global bonds via Hong Kong.

Philippe Dirckx, managing director and head of fixed income at the Asia Securities Industry and Financial Markets Association, said this could broaden the profiles of mainland investors, many of whom were seeking to diversify their assets.

"If you're looking at the new institutions that have been granted access, especially the mutual funds and wealth management, insurance companies, these are institutions that are looking for large sets of investment,” he told RTHK.

"They're looking at other links [that they do not] have onshore, [and] all the investment opportunities that they need to fulfil their end-clients' desire, catching [up] expectation in terms of yields or the profile of diversification."

He expected demand for both yuan-denominated "dim sum" bonds, as well as US-dollar-denominated bonds issued in the SAR, to be sought after by these investors.

The scheme's continuous tweaks, Dirckx noted, could also pave the way for global investors to boost their onshore bond holdings, which currently stood at three percent.

"The three percent is certainly way too low for now...But I think the trend will definitely be for international investors to hold way more of Chinese-assets than they currently do. My view is that it could go up to 10 percent if you compare to the peers," he said.

"I think we are at an interesting point now when we see (the) US dollar weakening against most of the currencies across the globe, and you've seen investors diversifying the investment outside of the US.

"So there are many factors that could drive the attractiveness of Chinese assets and Chinese government bonds for international investors.

"And by doing so, it will internationalise the renminbi," Dirckx added, although he cautioned many factors could affect progress, including interest rate differentials and geopolitics.