Cap­i­tal con­trol grip tight­ens


AS CHINA tight­ens its grip on cap­i­tal con­trols, one state­sanc­tioned haven from a weak­en­ing yuan is draw­ing at­ten­tion. Main­land in­vestors will turn to buy­ing Hong Kong stocks through cross­bor­der ex­change links as other ways of pur­chas­ing overseas as­sets be­come more dif­fi­cult. An in­crease in flows would pro­vide a boost to a stock mar­ket that has trailed global peers over the last four years, he said. Pol­icy mak­ers stepped up mea­sures to stem out­flows as the yuan suf­fered its worst an­nual loss against the US dol­lar in more than two decades, in­clud­ing re­quir­ing ex­tra doc­u­men­ta­tion from in­di­vid­u­als con­vert­ing yuan and block­ing the use of Chi­nese bankcards to buy in­sur­ance prod­ucts in Hong Kong. As a high-pro­file part of Pres­i­dent Xi Jin­ping’s pledge to in­te­grate China’s fi­nan­cial mar­kets with the world, the Shen­zhen and Shang­hai bourse links aren’t fac­ing the same threat.

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