Monday, March 11, 2019

China's New Ownership Restrictions

While we have been hearing about all the wonderful changes China is making, leading up to the trade agreement, we might look at what China has not done.  There was a short article in the Wall Street Journal that reminds us that there are many more restrictions on foreign entities in China than elsewhere. 

"Beijing caps foreign shareholdings for onshore stocks at 30% in total, and 10% for any single shareholder. Chinese stocks are growing in importance to global investors, but outsiders face other constraints in betting on Chinese markets, including trading suspensions and a lack of ways to hedge their risks through futures and options."

This is just one small example of how China is a great at asking for foreign concessions on trade, but is often unwilling to make them themselves. 

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