Chartwell Global ETF Report

Mr.Liu Mingkang, Chairman of CBRC, is now talking about restraints on allowing Chinese investors to freely invest through the Hong Kong Stock Exchange by measures such as imposing quotas. The Financial Times also reports that the China central bank and securities regulators are getting concerned that the opening measure might hurt local markets that sure look overpriced to many analysts. There is even speculation that only investors in large urban areas such as Beijing, Shanghai and Shenzhen might be able to invest through the HKSE.

After the banking credit quality issue and overall China political risk, China regulatory risk is the most important risk facing global ETF investors.

Meanwhile, the activist Chinese Government has approved private equity war chests to compete with international private equity firms interested in investing in China deals. According to an article in the Financial Times, the Centre for Asia Private Equity Research reports that since 2006 Beijing has approved the creation of eleven local currency funds with combined assets of $10.6bn.