China likely to lift ban on foreign investors
Staff Reporter 2012-11-01 17:20
Investors at a stock trading center in Shanghai. (Photo/Xinhua)
China is likely to lessen restrictions imposed on foreign investments in futures companies.
An unrevealed source quoted by the Shanghai Security News said Chinese monitoring authorities have ignored applications from foreign investment institutions since 2008. The only three joint-ventured futures companies in China are Galaxy Futures, CITIC Newedge Futures and JP Morgan Futures, approved by the authorities in 2008 before the ban.
Inside sources revealed that Chinese authorities "are very likely" to lift the ban on foreign investment institutions within a year, and that the authorities are currently aggressively preparing themselves to let foreign investors inject money into Chinese futures companies.
It is said that such a movement in the related policies is a response to a promise during the 4th Sino-US Strategic Economic Dialogue in May which stated that China "will allow up to 49% foreign funds invest in futures companies."
When interviewed by Shanghai Security News, China International Futures Research Institute vice president Wang Hongying said that opening the gates to foreign investment will bring in new transaction techniques, business talent and capital. Wang said that supplying futures companies' risk capital will be very important once foreign investors are allowed in the futures market.
Wang added that the most possible disputes might occur over the differences in management ideas, given that the economic model adopted by China could clash with sales models for financial products from foreign investment institutions.
