China opens doors to 600b yuan of fund sales via HK

Hong Kong

CHINA and Hong Kong will start cross-border sales of funds on July 1, widening access to financial markets and capital in the world's second-largest economy.

The initial quota will be a total 600 billion yuan (S$130 billion), split evenly in each direction, regulators in China and Hong Kong said on Friday. The regulators will establish a way to vet funds, it said. The allocation was bigger than anticipated, according to Invesco Ltd.

Mutual recognition opens a new channel for foreign asset management firms to tap household savings of around US$8 trillion in China, where tight capital controls remain. It also comes six months after the start of a cross-border stock link programme allowing mainland investors to buy Hong Kong stocks while giving…