Boosted foreign capital access to support market (2)

Remain optimistic

Some analysts have suggested that liberalization within the QFII/RQFII regime is being done to support domestic markets, which have recently tested new lows. While that argument seems intuitive, in our view CSRC has become increasingly agnostic about micromanaging equity markets directly, instead preferring to build a framework that will survive for the longer term.

The view from the ground, particularly for investment managers, is actually quite positive: major underlying shifts are already occurring and, while these don't point to an immediate reversal in macroeconomic indicators, they do serve as reasons to remain optimistic.

What has been surprising is how these changes are now beginning to be recognized outside of the Chinese mainland. By the end of the third quarter of this year, brokerage Asset Under Management has closed on 1 trillion yuan, the trust industry saw rapid gains in recent periods, nearing 6.3 trillion yuan in AUM as of the third quarter this year.

Having long sung the praises of the onshore market, the fact that many international firms have recently voiced a much more positive view, in aggregate, has taken us somewhat by surprise.

Z-Ben Advisors is a Shanghai-based consulting company, covering the Chinese asset management industry. Shanghai Daily has condensed the article. The opinions expressed are their own.

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