Are China A-shares due to drop off a cliff?

Ironically, reforms such as the QFII scheme are causing the stock markets to wilt. The government must act fast to replace incumbent listed companies with better ones if the markets to regain some vibrancy.

The news that the Chinese government has finally giving the green light for the Qualified Foreign Institutional Investor scheme after months, if not years, of debate, is striking. This is especially so put in the context of the far-reaching laws passed in the last couple of months. These finally open up previously non-tradable state shares to mergers and acquisitions by both domestic and foreign companies. Hence the historic acquisition of a 20% stake in the Shenzhen Development Bank by Newbridge...

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