While much attention this year has been focused on the trials faced by China’s stock markets, quiet but significant reforms have been transforming foreign participation in the country’s vast domestic bond market.

July was a landmark month, heralding the freeing up of access to China’s interbank bond market for overseas central banks, supranational institutions and sovereign wealth funds. A set of new regulations scrapped approval and quota requirements.

The measure ranks as one of the most important in a series of steps to integrate China’s bond market, now the world’s third largest with a capitalisation of $4.2tn at the end of last year, into the global financial system. China’s interbank market is where the vast majority of government and enterprise bonds are traded, but foreign participation is paltry with just 2.4 per cent of domestic government bonds held by foreigners at the end of 2013.