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1、Finding,Assets,In,ChinaFinding,Assets,In,China By Zhang Shasha It has been two years since global in-dex complier Morgan Stanley Capital International （MSCI） included Chinas A-shares on its MSCI Emerging Markets Index. The inclusion has made Chinas stock market more accessible to foreign investors a
2、nd Chinese assets have become a popular alternative. As of June 17， net capital infl ows through northbound trading， or money invested from Hong Kong Special Administrative Region into the Chinese mainland， totaled 1.08 trillion yuan （$153.5 billion）， increasing 611.6 billion yuan （$86.5 billion） co
3、mpared to that in May 30， 20XX， according to Shanghai-based information provider Wind Information. “The novel coronavirus disease （COVID-19） has inflicted heavy losses on the global economy in 20XX， but with an array of policy stimulus， China has taken a lead in economic recovery， which showcased th
4、e countrys resilience，” Wang Hongpin， General Manager of Morgan Stanley Huaxin Funds， told Y.“In the midst of a globally low interest rate environment， the return of investment in China is competitive. While its domestic financial market is going to open up wider， foreign capitals will continue to p
5、ump into the A-share market.” Policy stimulus On March 10， U.S. multinational investment bank JPMorgan Chase & Co. increased its stake in 15 Chinese companies by a hefty margin， according to information disclosed by the Hong Kong Exchanges and Clearing Ltd. It loaded up on 1.92 billion yuan （$271.5
6、million） worth shares of Ping An Insurance Group， which was its favorite one. The companies it invested in ranged from banking， insurance， infrastructure and investment companies to energy， following Chinas new benefi cial policies for these industries. China has been ramping up efforts to open up i
7、ts fi nancial sector. On June 18， the Ministry of Commerce issued a draft to solicit public opinion on administrative measures for foreign investment in listed Chinese companies， a new move to lower the threshold of the capital market. The draft proposes an effective easing of the investment thresho
8、ld by lowering the total asset requirements for foreign investors that are not controlling shareholders. Required assets of foreign shareholders will be reduced to $50 million from $100 million， and the assets they manage will be cut to$300 million from $500 million. The lock-up period for foreign i
9、nvestors holdings will be adjusted from three years to 12 months. It also proposes elimination of the requirement for foreign investors to implement strategic investment through the direct issuance of new shares via listed companies. It says the required shareholding ratio of foreign firms that plan
10、 strategic investment through agreed-on transfers will be reduced from 10 percent to 5 percent. “As a major country in the global industrial and supply chains， China bears an important responsibility for global economic stability. Lowering the threshold will promote the optimal allocation of Chinese
11、 and foreign resources and also drive the diversification of equity，” Dong Shaopeng， an adviser to the China Securities Regulatory Commission， told Global Times. In addition， the State Administration of Foreign Exchange also issued new rules on May 7 to scrap quotas on the dollar-denominated qualifi
12、 ed foreign institutional investor（QFII） scheme and its renminbi-denominated sibling RQFII， simplify the procedures for qualified investors repatriation of securities investment income， and create a sound policy environment for further internationalization of A-shares. Since April 1， the authorities
13、 also scrapped the limitations on the ratio of foreign shareholdings in securities and fund management firms. The move had been originally scheduled for December but was advanced. While domestic policies have laid a solid foundation for foreign capital infl ow into the A-share market， the inclusion
14、of Chinese stocks and bonds on global indexes such as the MSCI， FTSE Russell and S&P Dow Jones also plays a crucial role. “After Chinas inclusion into the three indexes， foreign capitals have been fl owing into the Chinese market either actively or passively. Moreover， since the estimated value of A
15、-shares is at the bottom of the global capital markets， they are attractive for foreign investors，” Yang Delong， chief economist of First Seafront Fund， told JRJ.com， an information provider for investors. He said since some foreign index funds design their products in line with the three global ind
16、exes， as more A-shares join the indexes， these index funds will passively allocate A-shares. The benchmark of hedge funds performance is also in alignment with the three global indexes， thus as more A-shares join them， active capitals will also allocate A-shares. Thats why foreign capital has been continuously fl owing into the market. Brighte
