This is a good news for the most part! Introducing foreign investors into stock market could be the smartest move, as they act as a buffer zone for a bunch of opportunists and short sight investors. Foreigners seeking intrinsic values may provide the incentive for domestic firms to look at longer term.
A three-step plan published by China’s central bank is the most detailed public proposal yet for loosening the government’s strict capital controls. If implemented as envisaged, the global economic landscape will undergo sweeping changes this decade.
Foreign investors will be much bigger players in Chinese stock and bond markets, which are now largely closed to them. The renminbi will take on a bigger international role, eating into the US dollar’s dominant position. Chinese companies will buy up far more of their US and European peers, which have been weakened by the global financial crisis.