China opens up Chinese stock trading to expats

Published:  14 Sep at 6 PM
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China is to allow expats to trade in Chinese stocks from Saturday 15th, but it seems very few are in a rush to buy.

From Saturday, most expats living and working across China will be permitted to open brokerage accounts for trades in yuan-denominated A shares, but many are in wait-and-see mode, quoting China’s reputation of rushing in where only fools dare to tread. One expatriate pointed out the volatility of the market, adding there will be mistakes needing to be corrected by brokerages and regulators before he’ll take the plunge.

Expats' attitudes are mirroring those of Chinese investors, who’ve pushed the Chinese stock market dangerously close to its lowest point since its 2015 epic crash. China’s take on the rule relaxation is in part due to Hong Kong’s new trading links and their positive effect on access to Chinese shares, with regulators considering a link with the City of London. In any event, expats should now be able to access a large number of smaller Chinese companies in the technology and consumer sectors formerly lacking in overseas listings and inaccessible via the normal exchange links.

In effect, expat employees of domestically listed firms have been able to have brokerage accounts for some years, as have permanent residents. The new changes are intended to expand the right to encompass expatriate nationals of 62 world countries which have cooperation treaties with China. Japan, the UK and USA, Singapore, Hong Kong and Australia all fall under this umbrella.

Research director at Beijing’s Institute of Finance Zhu Zhenxin told the media the move is symbolic in that it opens up and allows connections with international markets, but the impact on inflowing funds is likely to be negligible. Interested expats are querying whether or not brokerages will be able to offer trading apps or help in English, with several admitting adding Chinese stocks would diversify their portfolios.

However, most are concerned about the possible hassles of opening trading accounts, with a number of local firms already planning their strategies by upgrading their software and training employees.Further efforts to encourage expat participation include help in filling in forms and learning local trading regulations. Several are planning a media blitz aimed at expat business owners as well as foreign shareholders of Chinese-linked companies. In spite of all the above, a good number of expats are quoting Chinese investors’ comments about a ‘rigged system’, adding they’re not prepared to risk their hard-earned cash.
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