China approved the introduction of its first exchange-traded fund for government bonds as policy makers seek to expand the nation's debt market.

The fund, to be run by Guotai Asset Management Co, will be listed on the Shanghai Stock Exchange and benchmarked against an index of five-year government bonds, according to a statement posted to the China Securities Regulatory Commission's website on Tuesday.

The fund will be "a bridge" that allows individuals to invest in government debt traded on China's interbank market, which they are now barred from.

China Daily - Agencies