The expert explained why China has expanded the access of foreigners to trade shares

© AFP 2018 / Johannes EiseleЗдание the Shanghai stock exchange. Archival photoThe expert explained why China has expanded the access of foreigners to trade shares© AFP 2018 / Johannes Eisele

Expanding access of foreigners to acquire A-shares in China will not have much impact on the markets, but will contribute to shaping the image of openness and can be used as a pretext for trade negotiations with the United States, told RIA Novosti leading researcher of the Japanese Institute of fundamental research, Nissa, Cocotero m & e specialist in Economics and Finance in China.

On Saturday in China came into effect new rules that expand the access of foreigners to trade A-shares, which are traded on the Shanghai and Shenzhen stock exchanges and are sold for yuan. Previously, to open brokerage accounts could only foreigners with residence permit in China, as well as working in companies listed on the Shanghai and Shenzhen exchanges. Now apply for opening an account for depositing and accounting for A-shares is open to all foreigners working in China.

«Measures to mitigate the restrictions are in line with declared by the President of the PRC XI Jinping at the Asian forum in Boao of course for greater openness. They follow announced on July 1 the reduction of customs duties on imported goods and the easing of restrictions for foreign capital. In addition, with the deepening of foreign trade friction of China and the United States, the goal consists in the demonstration of openness of China and create the image of China as a country that opens and moves along the path of international cooperation. I think we need China as a pretext for trade negotiations with the United States,» commented the expert.

The easing of restrictions for foreigners to purchase shares will contribute to the improvement of PRC’s relations with Japan and Europe, which is important in terms of deepening of trade disagreements with the United States, he said.

«Even if relations with the United States as a result of these measures does not improve, China believes that this measure will contribute to the improvement of relations with Europe and Japan, since in a confrontation with the United States there is a need to switch to Japan and Europe in terms of trade items and raw materials. If there is a confrontation with the US, Japan and leading European countries, the Chinese production will rise by 2025. Thus, in the future China will continue to follow the path of easing various restrictions,» — says the scientist.

He believes that the introduction of new rules would lead to a demand for purchase of A-shares in the world market, but the impact will be small.

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