Amid ever-increasing foreign investor interest, China’s bond market is expected to be included in the international bond index as soon as the end of 2018, Yicai.com reported.

Huang Jiacheng, bond investment director at Fidelity International, who was engaged in part of the assessment work on the index committee, revealed the group’s progress. Most likely, the committee will also set up a certain period of observation.

However, Huang also pointed out that foreign capital still has concerns about China’s tax system, bond rating and liquidity before they invest in its bond market.

Huang Yi, president of Bloomberg China, said tax standards of China’s bond market needs to be further clarified. So far, foreign investors investing in non-government bonds are required to pay a withholding tax of 10%. The tax treatment of capital gains also remains to be clarified.

Meanwhile, China’s bond market credit rating is generally higher than international standards, with nearly 60% of bonds rated as triple-A and only 0.1% below triple-B.