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Chinese regulators vow to expand stock connect in further market opening

Expanding stock connect programme link with Hong Kong among other steps

Chinese market | Hong Kong | China economy

Bloomberg  |  Beijing 

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“There remains a huge potential” to usher in foreign capital, Fang said. Photo: Shutterstock

Chinese regulators vowed to accelerate the opening up of its capital and deepen reforms to attract more foreign investors.

The regulator will expand the scope of investments allowed in the stock connect program link with Hong Kong, and allow foreign investors to trade more commodities futures products, China Securities Regulatory Commission Vice Chairman Fang Xinghai said at the China Financial Annual Forum 2020 on Sunday in Beijing.

Officials are planning to announce revised rules on qualified foreign institutional investors as soon as possible to increase their “willingness and confidence” to invest in China, he said. Foreigners currently hold only 4.7 per cent of Chinese stocks in circulation, way below the more than 30 per cent in like Japan and South Korea, he said.

“There remains a huge potential” to usher in foreign capital, Fang said.

China is also opening its financial this year to allow Wall Street giants such as Goldman Sachs Group Inc. to take full ownership of ventures in the country, counting on them to provide fresh investments and foster a more competitive local industry.

The move comes against a backdrop of rising tension with the US over issues including trade and the crackdown on Weighed down by the virus outbreak, China’s economy is poised for its slowest expansion this year in four decades. The participation of foreign investors has helped make the Chinese stock market “more rational” and valuations “more reasonable,” Fang said.

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First Published: Mon, September 07 2020. 00:44 IST