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China's new investment law will deepen market liquidity

Daryl Guppy
Daryl Guppy3/25/2019 7:30 AM GMT+08  • 6 min read
China's new investment law will deepen market liquidity
SINGAPORE (Mar 25): At the end of 2018, around 960,000 foreign companies had invested about US$2.1 trillion ($2.8 trillion) in China. Investment at this level is a significant vote of confidence in the Chinese economy and the future growth of China. The U
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SINGAPORE (Mar 25): At the end of 2018, around 960,000 foreign companies had invested about US$2.1 trillion ($2.8 trillion) in China. Investment at this level is a significant vote of confidence in the Chinese economy and the future growth of China. The US$2.1 trillion does not include foreign businesses that do business with China but do not have a direct presence there.

The passing of the revised Foreign Investment Law by the National People’s Congress is set to change the Chinese investment landscape again. These changes will propel China down a path that will open its capital markets at a faster rate. The pace of change has been influenced by the table-thumping tweets from US President Donald Trump and US Trade Representative Robert Lighthizer.

However, the path is not one determined by Trump. It is one that has been steadily followed for several years. Milestones on the path include the cross trading between Shanghai and Hong Kong; in the bond market; and between the London Stock Exchange and its Shanghai counterpart.

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