China has taken another big step towards liberalising markets with plans to give Chinese individuals greater freedom to make overseas investments through the Shanghai free-trade zone — just as the communist country opens its stock markets to global hedge funds for the first time.
Today’s launch of the Shanghai-Hong Kong Stock Connect, which will allow investors in each centre direct access to the other’s stock market, is one of the most significant openings of China’s capital account in a decade. Wealthy Chinese investors can now start trading hundreds of stocks in Hong Kong, including international companies such as Prada and HSBC.
Separately, in an interview with the Financial Times yesterday, Han Zheng, party secretary of Shanghai and a member of China’s 25-strong politburo, said that the Chinese city’s much-vaunted free trade zone was planning to let qualified individuals open capital accounts “in a gradual and orderly manner”.