Government, corporate, and convertible bonds in the People's Republic of China (PRC) are traded on either the interbank bond market or the exchange traded bond market.

Interbank Bond Market

The interbank bond market is a quote-driven, over-the-counter (OTC) market. It is the platform used by (i) the Government to raise funds by issuing bonds, (ii) financial institutions to adjust their liquidity and rationalize assets, and (iii) the People's Bank of China (PBC) to conduct open market operations to attain monetary policy goals. Trading on the interbank bond market is mainly in repurchase agreements and spot.

Transactions between members of the Central T-bond Registration and Settlement Co., Ltd. are matched in the China National Interbank Funding Center (CNIFC) by asking price, or made in the form of OTC trading by their own agreement. Open market operations are by agreement between PBC and primary market dealers. An electronic trading system (ET03) was developed to facilitate bond issuance and collection of trading data, while another system—known as an F-system—analyzes interbank trading data.

 Exchange Traded Bond Market

Treasury, corporate, and convertible bonds are traded on both the Shanghai Stock Exchange and the Shenzhen Stock Exchange. Secondary market transactions for government bonds, including spot trading and repurchase agreements, also take place on these exchanges. Deals are conducted based on tender prices. Trading on both exchanges follows the principle of price and time precedence.