Deciphering Chinese Capital Markets: Current Scenario, Challenges and Potential
DOI:
https://doi.org/10.12728/culj.7.8Abstract
China undoubtedly has had always the world’s attention, ranging from the issues of governmental and economic control to its increasing rates of production. Termed to be the world’s production capital, this oriental country has an ever evolving capital markets structure that is often categorized as merely governmental control. The past few years has essentially witnessed a metamorphosis of this myth as Chinese capital markets are undergoing a change in terms of both their structure and the substantive law governing the same. China has opened its gates to foreign investors and has endeavoured to attain a more transparent procedure to attract investment in the country by permitting their entry the capital markets structure. However, this privatization and entry of foreign players in the Chinese capital markets is dampened by the vigorous control of the Chinese government, thereby leading to questions regarding the legitimacy of an open capital market structure. Further, China’s association with Hong Kong through its stock exchange has gained relevance in the past few years, drawing the attention of global investors. This paper attempts to analyse the past, the present and the future potential of one of Asia’s leading economies as it could hold the key to transformation of global economics and trade. The researcher has adopted a comprehensive method by focusing primarily on the securities market in China, along with drawing light on the status quo and the challenges in other tools of capital markets like the bonds and sovereign funds. This method of analysis leads the researcher to promulgate the view that China has taken initiative to open its capital markets structure and is committed to become a global player but remains reticent due to the massive governmental control at each level of regulation in the capital markets structure.References
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