China removes ban on foreign investment

China removes ban on foreign investment

Chinese
authorities are going to do next
step to increase the convertibility
RMB – they will remove restrictions on
foreign investments for individuals
and companies. This was reported today
The Wall Street Journal. Council of State
China in a few weeks will remove
restrictions applicable now
allow individuals and companies
to make direct purchases of stocks, bonds
and real estate abroad.

at first
such investments will be monitored and carried out in
certain trade areas, but then
promise to expand the program. "it
breakthrough – says Hans Shen, head of Hony
Capital Ltd. (One of the largest funds in China
direct investment). – However, the run
this project will be with great caution,
as the government wants to control
risks".

If everyone
It will develop successfully, the Chinese investors
there will be more opportunities for
management of their resources, and China
able to reorient the economy in
more on consumer
and service sectors. As long as
the risk that changes in flight isolated
funds from China, as well as further
weakening of economic growth. If
the money will quickly go out of the country,
the urgent need to strengthen the yuan, but
bad impact on this again
the competitiveness of Chinese
companies abroad.

But while the authorities
waiting to see what will decide the International Monetary
Fund over the system of special rights
Drawing (SDR) – there is a chance that the yuan
announced the official reserve currency,
and here it is exactly contribute
expand the use of the yuan.

Concerning
Foreign investment in Chinese
companies, the picture is fairly
positive. The share of investments in Chinese
shares in Pan-Asian and global funds
funds of emerging markets reached a record on
this week. According to MarketWatch, foreign
investors suffered money into Chinese
equity funds at a record pace, even
in spite of the warning signs of imminent
Rally complete.

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