Tianjin's mayor assured investors yesterday that the city's pilot program, allowing mainlanders to invest in Hong Kong-listed shares, is on track.
"There's a lot of preparation involved. Risk assessment and research is under way to open the door for mainlanders to invest in the Hong Kong stock market," Huang Xingguo, mayor of Tianjin, said yesterday.
"The project's going smoothly, but timing depends on central government approval. I can assure you that Tianjin's status as a pilot city (for financial reform) will not change," he said.
The scheme is in line with the nation's economic development and investor demand and will be an effective way to bring in conversion of the renminbi via capital accounts, Guo Qingping, chief of Bank of China's (BOC) Tianjin branch, said on the sidelines of yesterday's NPC session.
But authorities are cautious about rushing the program through, due to its complexity and risk.
"One risk is hot money flowing into and out of the mainland," Guo said.
BOC was originally expected to be the only financial institution providing the program, but Guo said the details are still being ironed out.
The trial scheme was announced in August last year as a way to diversify mainland investor channels. But it's been put on hold amid the unfolding US subprime crisis and global stock market uncertainty.
Preparation for the program includes payment systems, renminbi conversion, regulation changes as well as extensive risk assessment, Huang said.
Liu Mingkang, chairman of the China Banking Regulatory Commission, told China Daily earlier that no timetable has been set for the pilot scheme, which will allow mainlanders to invest directly in Hong Kong-listed shares. The regulator stressed that more research into the system is needed.
Meanwhile, a timetable is not yet available for Tianjin's new offshore financial center, which is also subject to further research, according to Guo from BOC.
(China Daily March 10, 2008)
