China's conflicting goals keep investors out

Hong Kong

CHINA'S doors to foreign investors may be opening ever wider, but that's not enough for many worried about finding an exit.

Fourteen months after qualifying for official reserve-currency status, and after a series of steps opening up domestic markets to overseas funds, the take-up remains below estimates. For all of China's attraction as the second-largest economy with large and expanding domestic capital markets, regulators' efforts to tamp down on outflows of money have stoked concerns.

"There's no return lower than not getting your money back," said Brad Holzberger, chief money manager of QSuper Ltd, an Australian pension…