For years, China got away with relatively strict controls on foreign investment because the near-infinite attractiveness of the domestic market meant foreign investors were prepared to put up with them.
There are a few policy objectives behind these rule changes
There isn’t a whole lot of urgency in this readout – financial regulators are signaling that policy in H2 2023 will look a lot like policy in H1 2023.
We don’t know a lot about Wang, but will be following him closely in his new position of power.
Policymakers have for years tried to expand the role of direct financing and wean the economy off its traditional dependence on indirect financing provided by the banking system, which seems incapable of allocating financial resources adequately to the government’s priority areas.
Traditionally, Hong Kong was a gateway for foreigners into China. Its future lies in being a gateway for Chinese capital to the world.
The Swap Connect will increase the international appeal of China’s financial markets by giving foreign investors a way to hedge their exposure to Chinese fixed-income products.
This change has been on the cards for years and, while it was already being applied to the country’s three smaller stock markets, the two biggest bourses – the main boards in Shanghai and Shenzhen – were still operating under the old, time-consuming system.