China looks for capital ideas

In order to finance its social security and pension deficit, the Chinese government is pondering how to divest itself of its enormous holdings in state companies.

One solution is the creation of a gigantic fund, modeled on the Hong Kong Tracker fund. To increase demand and prevent a slump in the share price, it could open the domestic A share markets, so far strictly off limits, to foreign investors, as well as expand its domestic institutional investor base. This would make the B share market, the foreign currency market open to foreigners, obsolete.

Under China's capital markets reform program and under pressure from its accession to the WTO, foreign experts believe that it is important for the government to downsize its economic stake in the country's corporate sector. Although China's stock markets' market cap is $450 billion, two thirds...

FinanceAsia has updated its subscription model.

Registered readers now have the opportunity to read 5 articles from our award-winning website for free.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team subscription (2-5 users), or office-wide licences.

To help you and your colleagues access our proprietary content, please contact us at subscriptions@financeasia.com, or +(852) 2122 5222

Article limit is reached.

Hello! You have used up all of your free articles on FinanceAsia.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team subscription (2-5 users), or office-wide licences. To help you and your colleagues access our proprietary content, please contact us at subscriptions@financeasia.com, or +(852) 2122 5222