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Chinese regulators have promised to speed up the opening of its capital markets and deepen reforms to attract foreign investors.
The regulator will expand the scope of investments allowed in the Stock Exchange project link with Hong Kong, and will allow foreign investors to trade more products futures, Fang Jinghai, vice chairman of the China Securities and Exchange Commission, told the China International Monetary Forum 2020 on Sunday. Beijing.
Officials plan to announce revised rules soon on qualified foreign institutional investors to increase “willingness and confidence” to invest in China, he said. Foreigners currently hold only 4.7% Chinese shares in markets such as Japan and South Korea, which is less than 30%.
“There is a huge potential for foreign capital to be raised,” Fang said.
China is also opening its financial markets this year to allow Wall Street giants such as Goldman Sachs Group Inc. to take full ownership of the ventures in the country, relying on them to provide new investments and grow a competitive local industry.
The move comes amid growing tensions with the United States over issues including trade and repression in Hong Kong. China’s economy, weighed down by the virus, is poised for its slowest expansion in four decades this year.
The contribution of foreign investors has helped make the Chinese stock market “more rational” and the ratings “more reasonable”. He said the long bear market sessions and short bull runs that have plagued China for a long time are “disappearing”.
After easing the rules in 2018, China last year lifted the quota for foreign investors to buy shares and securities. The country is pushing to increase the use of the yuan in international transactions, while attracting more foreign capital.
Eugene Kian, chairman of UPS Group AG’s local securities agency, said the forum needed a “loose, open” regulatory environment, calling on regulators to facilitate micro-regulation such as individual products and subsidiaries of financial institutions. . This will allow companies to use self-discipline and create new products without fear of disciplinary action, he said.
Chen Yulu, deputy governor of the People’s Bank of China, told the forum that the demand for yuan-denominated financial assets to international investors is increasing as more central banks use Chinese currency in their foreign reserves. Foreign reserves of such domestic assets rose 37% to 7.7 trillion yuan ($ 1.1 trillion) as of July 31.
The yuan could accept “more international responsibilities” in the future as China’s opening deepens, he said.
– With the help of Sharon Chen and Dingmin Zhang
(The 9th column adds feedback from UPS.)
