China boosts foreign access to huge onshore capital markets

China boosts foreign access to huge onshore capital markets

Opening up futures trading is latest sign of how Beijing is forging ties with Wall Street

New rules making it easier for international investors to trade in China’s booming capital markets have come into force, adding momentum to Beijing’s sweeping liberalisation of its financial system.

The measures, which went into effect on Sunday, update the official schemes that govern foreign access to the country’s enormous capital markets.

They allow much greater access to China’s onshore futures markets, an important tool in hedging stock market positions as well as for speculating on price movements. Foreign investors will also be able to lend out their holdings of shares that trade in Shanghai and Shenzhen, allowing others to use them to take bearish positions.

The move is the latest step in the opening up of China’s vast but tightly-controlled financial markets, a process through which the country is forging closer ties with Wall Street despite rising geopolitical tensions with the US.