• Thu
  • Sep 18, 2014
  • Updated: 12:10pm
NewsChina
DIPLOMACY

China opens HK$100 billion door to German investors

The agreement, which allows investments in both Shenzhen and Shanghai, is expected to help both those markets as well as the yuan's globalisation

PUBLISHED : Monday, 07 July, 2014, 3:38pm
UPDATED : Tuesday, 08 July, 2014, 7:26am

China will allow Germans to invest up to 80 billion yuan (HK$100 billion) in China's stock exchange, a move that will help boost the fragile market and further internationalise the yuan.

In a joint press conference following talks with visiting German Chancellor Angela Merkel, Premier Li Keqiang also said the Chinese economy had improved in the second quarter and the country can keep its economic growth within a reasonable margin. The government has set 7.5 per cent as its GDP growth target for 2014.

Li warned against the risks of a slowdown, saying the country could not be complacent. "China will continue to stimulate the vigour of the market," he said.

Li and Merkel yesterday witnessed the signing of six documents on economic cooperation. German investors will be allowed to invest in the bourses in Shanghai and Shenzhen through the Renminbi Qualified Foreign Institutional Investor scheme. Britain and France, among others, have a similar arrangement. Last week, China granted an 80 billion yuan quota to South Korean investors. By the end of June, the government had approved 250.3 billion yuan of investment under the scheme by 71 domestic and foreign institutions.

Analysts said the move would help China's struggling stock market, and yuan-denominated investment would help the internationalisation of the currency.

Merkel was due to meet President Xi Jinping late yesterday. It is Merkel's seventh trip to China since taking office in 2005. Trade issues have apparently dominated the agenda, as Merkel brought with her the largest German business delegation to visit the country.

Li also announced yesterday that he would visit Germany in October.

Additional reporting by Victoria Ruan

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This article is now closed to comments

rudy.haugeneder
The yuan will replace the American dollar as the primary international currency within a decade, perhaps even by the end of this decade -- within less than six years.
Similarly, within that time frame, the Chinese military will be technically advanced and strong enough to challenge the combined American and Nato military anyplace on the planet.
rudy.haugeneder
The yuan will replace the American dollar as the primary international currency within a decade, perhaps even by the end of this decade -- within less than six years.
Similarly, within that time frame, the Chinese military will be technically advanced and strong enough to challenge the combined American and Nato military anyplace on the planet.
chaz_hen
And you'll be placing bets on your predictions in Macau AND Vegas, I take it?
mrlcooper
Why go so far? I'll take a piece of that action!
ettore.greco2
All that is happening in our days is the prelude to enormous changes but even before discussing in regard of the possible remedy one must be clear about how we came to this point recognizing both physiognomy and origin of the threat
Since George H. Bush was CIA director, the US secret State agencies had played a double role to finally get to where we are today when every person is constantly monitored by NSA and other agencies not to report the information to the USGovernment but to feed with all data the embryo of a new superpower still kept hidden
In brief, here is how it came to possess all means and to know everything of everyone.
In 1988 the ex CIA director was elected president although this was a US president like no other. His attention quickly turned to Saudi Arabia and Kuwait from where he personally benefited immensely in exchange for the protection of those tyrants and their oil while in the United States instead the president observed his son, Neil, to be the author of the largest robbery of its time, the Savings and Loans scandal. After a few years, the next largest robbery in history was Enron that financed the electoral campaign for his other son, George. Once he also became president, the son plotted the most infamous attack on US soil, 9/11, to begin the widest monitoring program ever conceived and to consolidate for 8 years the interest of one family above all
When Jeb Bush will be US president the next WorldWar will be inevitable
One Solution
mrlcooper
It's one pill three times a day Ettore! Have you taken them all at once again?
tkruemmer
Supposed to be a shot in the arm for lackluster Chinese stock markets and a step for 'opening up'. Not sure, which German institutional investor would want to be exposed to China market right now, May be something for the future, if it is a bright one.
orakio717
HKD 100 billion ~ USD 9.8 billion
And only investment in stock exchanges, not Foreign Direct Investment - somewhat unexciting.
And premature to talk about yuan internationalization because China's internal economy is not ready yet. Among other issues, economic structural imbalance is still very problematic.
Camel
And HK is losing the position for the Offshore RMB trade. A shame, but this is what the HKners want. Once, the RMB will be internationalized, HK will lose it touch.
 
 
 
 
 

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