China’s aspiring investors, eager for options, feeling lukewarm on cross-boundary offerings
- Products purport to make deposits between Hong Kong and mainland China easier, but their utility is limited as investment vehicles
- Would-be investors want more options, but capital controls already being tested by overseas exodus and government desire to prevent more outflows
Stella Lu, an interpreter in China’s southern metropolis of Guangzhou, has been on the hunt for safe investment products with a decent return.
She, like many of the country’s middle class, is left with limited onshore options, and Beijing’s capital controls make overseas investment a non-starter.
As real estate and A-share stocks have lost their appeal amid slowdowns, gold and termed deposits have become two popular alternatives – even with the rate offered by Chinese banks being less than half those available in the US.
The introduction of a new product has provided another option for budding investors – one which also presents a test for Beijing’s oversight of capital flows.
Lu’s interest was piqued. “This would be a new channel to invest in various financial products in Hong Kong,” she said.