A new facility allowing investors in mainland China to buy and sell bonds in Hong Kong will provide an alternative channel by which they can invest overseas.
The arrangement, which went into effect on Friday, is aimed at easing restrictions imposed on Chinese investors to limit capital outflow.
For the time being, sovereign and corporate bonds, which are denominated only in Chinese yuan or Hong Kong dollars, can be traded.
An annual cap of about 77 billion dollars in such investment is designed to prevent rapid cross-border capital outflow.
The new scheme is expected to help the Chinese market become more open and to facilitate funding of foreign businesses by Chinese investors.
It is also hoped that the facility will enhance Hong Kong's standing as an international financial center.
The arrangement is expected to deepen economic ties between Hong Kong and the mainland.
Another scheme set to start soon will allow individuals living in Hong Kong, Macao and neighboring Guangdong Province in mainland China to invest in wealth-management products offered by banks operating in any of the markets.