Regulator urges further opening of financial sector

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Chinese stock market. Photo: iStock

China’s financial sector needs to be further opened up, along with the capital market, said Fang Xinghai, deputy director of the China Securities Regulatory Commission, Yicai.com reported.

According to Fang, at present the market value of A-shares held by foreign investors accounts for only 2% of the total market value. Thus, a further opening up is necessary, Fang added.

On May 31, 233 China large-cap A shares were included in the MSCI Emerging Markets Index, which marks a key step for China to become integrated into the global financial market.

Fang said the inclusion to MSCI has already attracted an increasing amount of foreign capital in just two weeks.

Data shows that as of June 11, the net daily inflows of Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect reached 3.61 billion yuan (US$560 million), an increase of 167% compared to the average daily capital inflow in the first five months.

Under the current partial inclusion plan, China’s A-shares have a weight of 5%. Fang thinks the inclusion factor could be further expanded to 15% to 20% and it is under discussion.

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