(China Alert) Inbound access: Connecting the dots

– The Shenzhen Connect will bring investors closer to a fully quota-less system
– R/QFII are likely to become the secondary channels in the absence of a dramatic overhaul
– This points to firm reasons not to give up licenses

Update: The long-awaited Shenzhen Connect kicks off on December 5. While this is important, let’s look at the bigger picture: Asset managers and owners should reassess how they enter China. The Connect has now become the primary inbound access channel. Along with the Shanghai Connect and the China interbank bond market (CIBM), a significant proportion of investable assets on the Mainland is accessible without individual quota restrictions. Z-Ben Advisors believes R/QFII have been marginalized; down, but not out. We have already seen investors begin to prioritize their inbound access through the Connect.

Even before the announcement on November 25, managers had already begun the transition…

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