(3)What has been the response in the first quarter of this year to the central bank opening the country's interbank market to overseas investors?

Currently foreign investors still buy mainly treasury bonds and policy bank bonds. There two reasons behind it:

First, our country’s treasury bonds offer higher yields than many other G20 countries. And given investors may have concerns about information disclosure when buying corporate bonds, purchasing treasury bonds remains a safer choice as it carries very low credit risk.

Second, investors are worried about exchange rate. As the market expects RMB’s further devaluation against dollar, investors have turned more cautious when investing in onshore RMB bond market, especially in short term. While the investors would unlikely ignore the onshore RMB bond market after RMB joining the SDR basket, they may need more time to understand and analyze the Chinese bond market and issuers before they formulate a more comprehensive strategy.

(4)What’s your take on the reasons behind the sharp growth in China’s green bonds since the first quarter of this year?

It shows the government’s determination to drive the structural adjustment. In the past the industries with overcapacity occupied too much capital of the market, that’s why green bond couldn’t grow at that time. But now green industries mean new growth opportunities in many aspects. Encouraging the green bonds’ development could also allocate funds from industries such as iron and steel to green sectors. It could lead capital to flow more in line with the government’s policy goal, especially to help to fulfill the commitment to reducing carbon emissions jointly with other countries.

Currently most green bonds are mainly issued by financial institutions. Financial innovation could be a way to diversify the issuer base to other entities, such as monetize the green factors. Government could also launch rewarding measures, such as offering tax returns and subsidies, to encourage involvement of more companies. Bring more green projects into practice, and then guide the companies and investors to have more sense of Corporation Social Responsibility. Gradually cultivate the mechanism to support sustainable development.