Poll analysis

08/28/2013

The large number of regulatory agencies within China's financial sector is a common complaint. Thus, it is not surprising that a majority of poll respondents view the new "super agency" favorably, believing it might pave the way for faster reforms and liberalizations. With only 19% of respondents saying that the new "super agency" would not accelerate reforms, the reception appears better than expected, given that many remain highly skeptical about the new leaders' resolve and ability to push through reforms and liberalizations, which are among the main themes that have been frequently mentioned by officials since the 18th Party Congress last year. Concrete actions have been taken to liberalize the Qualified Foreign Institutional Investor, Renminbi Qualified Foreign Institutional Investor, and Qualified Domestic Institutional Investor schemes, as well as the cross-border mutual recognition of funds. As the pace of liberalization determines the timing and extent of China A-shares going into the MSCI and FTSE global indices, the "super agency" helps promote further internationalization of China's equity market, bringing offshore capital as well as international management and governance best practices into China's companies. -- Samuel Lum, CFA, Director, Private Wealth & Capital Markets, CFA Institute

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