HSBC China Fund, a closed-end fund which yesterday received the go-ahead to give shareholders the chance to redeem their shares, says it will increase investment in China equities and predicts a strong performance in B shares in particular. At an extraordinary meeting yesterday shareholders approved a proposal enabling shareholders to exchange a portion of their holding in the company for shares in the open-ended HSBC GIF-Chinese Fund through the acquisition of US$83 million of the company's listed assets by the Chinese Fund. The new structure, which would take effect in two weeks' time, would allow investors to redeem their shares. After the meeting, HSBC Asset Management associate director Richard Wong said the short-term correction in China-listed shares, after moves to cool down the market, would help create a fairer market for local individual investors. Mr Wong predicted that more investment would shift to B shares since the dual reduction of interest rates last year. He said investment in red chips would be 'slightly' expanded within the open-ended fund's Hong Kong weighting, which accounted for 54 per cent of the fund. Of that, two-thirds was invested in red chips. Mr Wong said the Hong Kong portion would be raised to 60 per cent but he would not say what further investment would be made in red chips. He believed that in two to three years' time, red chips would show 'great rewards' as they grew with the Chinese economy.