One of the financial markets off limits for foreigners were China’s stock markets. But that might slowly change, and Shanghai-based business analyst Shaun Rein explains in Marketplace what is happening on the ground.
Other than an elite few, not many foreigners are permitted to buy stock in a Chinese company on a Chinese stock market. But that will change soon. The Wall Street Journal is reporting today that China has approved a new plan to allow U.S. investors to indirectly access its stock markets. The move is being seen as an important step forward in opening China’s markets to the international community.
Shaun Rein, managing director of the China Market Research Group in Shanghai, says the reason China has so far been reluctant to allow U.S. investors into its stock markets has to do with fundamental differences between the Chinese and American economies.
“The Chinese government has always prevented everyday Americans from buying equities in the Chinese stock markets because they’re very scared about manipulation in the financial system, because they run a command economy, and they’re not really prepared for fluctuation like we are in the United States,” Rein says.
Currently, if an American investor wanted to place a bet on more Chinese growth, she might buy stock in a company that does a lot of business in China, such as Caterpillar.
Will the banking bubble burst?
On Monday 11 November shadow banking expert Sara Hsu will be discussing the latest developments in the +China Weekly Hangout and give her view in an upcoming hangout on what we can expect in the months to come, and hopefully has already some idea of what the Third Plenum will lead to. Broadcasting time will be 5pm CET, 11am EST and (unfortunately) midnight at Beijing time (but you can watch the session also later). Questions will be asked by +Fons Tuinstra of the China Speakers Bureau. There will be no other guests in the hangout – unless you have some very good arguments. But questions can be asked during the event, from our event page here.
What can China learn from Singapore on sustainability?
Our sustainability expert Richard Brubaker from Shanghai explain in the China Weekly Hangout on October 10 what features in sustainability in Singapore could be applied in China too, and what it takes to get it done. Moderation by Fons Tuinstra of the China Speakers Bureau.