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Wurzel Of Highbridge

Qualified Domestic Retail Investor Scheme

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http://China Outlines Plan to Ease Capital Curbs, Push Yuan

Chinese nationals will be able to buy equities and real estate via a Qualified Domestic Retail Investor scheme, Wang Dan, a deputy director general at the central bank, said today at a conference in Beijing. There are also talks under way to give locals access to yuan capital markets in Singapore and London, she said, without giving any start dates or sizes for the programs. Agricultural Bank of China Co. said today it was looking into arranging sales of yuan-denominated Global Depositary Receipts in London for Chinese companies.
“As China’s money supply keeps increasing and the property market shows signs of bubbles, a new pool needs to be found to soak up the money,” Wu Kan, a fund manager at Shanghai-based Dragon Life Insurance Co., said by phone today. “These measures will also set the stage for a full opening of the capital account, which is an important goal for china’s ongoing financial reform.”

Thoughts please?

Why would china allow outward property investment at a time their own market is crashing?

New Zealand see it as a problem:

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11343693

Hong Kong-based Li Gang said the Chinese Government had been pushing its state-owned enterprises to go out into the world through investments and wanted to encourage its citizens to do the same.

Investment flows into this country, particularly into property, would increase as capital controls were eased, he said.

Li Gang said the effect those flows would have on property markets in cities like Auckland, Sydney and London were likely to become a "very hot topic".

Li Gang said the New Zealand Government would need to introduce suitable "policy responses" to address a potential increase in Chinese investment in this country's property market.

"Chinese money should not [be allowed to] negatively affect local residents' socio-economic welfare."

I know that London will be much less affected than NZ, but I expect the UKIP gang will be even more upset.

Edited by Wurzel Of Highbridge

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We'll send you all our manufacturing if you recycle some of the gains into our pet property bubbles and finance sector.

You reckon our government would not sell us down the river like that?

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Li Gang said the New Zealand Government would need to introduce suitable "policy responses" to address a potential increase in Chinese investment in this country's property market.

"Chinese money should not [be allowed to] negatively affect local residents' socio-economic welfare."

However, Housing Minister Nick Smith said Chinese investment in New Zealand was not significant and was not having a large impact on property values.

"In short, I'm not overly concerned," Smith said. Smith said Li Gang's views diverged from those of some local economists who believed foreign investment was not significantly affecting property prices.

The usual stuff.

As soon as the Chinese money affects the "local residents' socio-economic welfare" then the Housing Ministers will be blaming it on overseas investors and saying they can't do anything about it.

The banks will be blaming it on lack of "suitable policy responses".

UK people know all about that particular type of double bind - with the UK government saying that the BoE has the power to control the London mega bubble but the BoE saying oh no it hasn't and round and round and round they go at the expense of "local residents' socio-economic welfare".

Edited by billybong

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The usual stuff.

As soon as the Chinese money affects the "local residents' socio-economic welfare" then the Housing Ministers will be blaming it on overseas investors and saying they can't do anything about it.

The banks will be blaming it on lack of "suitable policy responses".

UK people know all about that particular type of double bind - with the UK government saying that the BoE has the power to control the London mega bubble but the BoE saying oh no it hasn't and round and round and round they go at the expense of "local residents' socio-economic welfare".

Oh yes, a bit like Carney coming out and crying crocodile tears that no bankers were held responsible for their actions when writing not just dodgy, but downright illegal loans together with the manipulation of every rule they could get around and passing the crap first onto other investors, then the taxpayer. Complained at not having any regualtion in place or any laws - which is a downright lie, as what would have happened is that the banks would have implicated the central bank and politicians becuase they were being encouraged explicilty and implicitly to behave that way. That is why no bankers went to jail.

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Bear in mind they've been proposing this for a while:

http://uk.reuters.com/article/2013/06/25/uk-china-investment-idUKBRE95O01Z20130625

http://www.bloomberg.com/news/2014-04-02/hong-kong-exchange-surges-on-china-stock-market-access-report.html

As with everything involving china and reform or liberalisation it's all slow and circular because each economic policy impacts every other, so there are winners and losers.

China has rentiers too and like ours they quite like the way things are now.

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