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Please be advised that future verbal and written communications from the bank may be in English only. These communications may include, but are not limited to, account agreements, statements and disclosures, changes in terms or fees; or any servicing of your account.

Por favor, tenga en cuenta que es posible que las comunicaciones futuras del banco, ya sean verbales o escritas, sean únicamente en inglés. Estas comunicaciones podrían incluir, entre otras, contratos de cuentas, estados de cuenta y divulgaciones, así como cambios en términos o cargos o cualquier tipo de servicio para su cuenta.

Informamos que as futuras comunicações do banco, verbais e escritas, podem estar disponíveis apenas em inglês. Essas comunicações podem incluir, entre outras, acordos de conta, extratos de conta e divulgações, alterações aos termos ou tarifas, ou qualquer tipo de serviço pertinente à sua conta.

仅此通知,本行即日起发出的口头及书面通信可能将只提供英文版本。这些通信可能包括但不限于账户协议,账单和通知,条款或费用变更;或任何为您账户提供的服务。

Please be advised that future verbal and written communications from the bank may be in English only. These communications may include, but are not limited to, account agreements, statements and disclosures, changes in terms or fees; or any servicing of your account.

Por favor, tenga en cuenta que es posible que las comunicaciones futuras del banco, ya sean verbales o escritas, sean únicamente en inglés. Estas comunicaciones podrían incluir, entre otras, contratos de cuentas, estados de cuenta y divulgaciones, así como cambios en términos o cargos o cualquier tipo de servicio para su cuenta.

Informamos que as futuras comunicações do banco, verbais e escritas, podem estar disponíveis apenas em inglês. Essas comunicações podem incluir, entre outras, acordos de conta, extratos de conta e divulgações, alterações aos termos ou tarifas, ou qualquer tipo de serviço pertinente à sua conta.

仅此通知,本行即日起发出的口头及书面通信可能将只提供英文版本。这些通信可能包括但不限于账户协议,账单和通知,条款或费用变更;或任何为您账户提供的服务。

Shanghai Financial District in fog

Perspectives

China to take next step in capital account opening

Ken Peng

By Ken Peng

Head - Asia Investment Strategy

February 26, 2021Posted InInvestment Strategy

  • China is planning to further open up its capital account by allowing more flexibility for domestic individuals to make outbound investments, as well as making China more attractive for foreign investors and issuers. The plans are still under study at financial authorities led by the State Administration of Foreign Exchange (SAFE). The timing is expected to be some time in 2021.
This potential policy move serves two key purposes:
  • Alleviate currency appreciation pressures, while the central bank normalizes monetary policy, as noted in the PBOC’s 4Q monetary policy report (MPR).
  • Facilitate multi-lateral trade and investment agreements, as well as RMB internationalization and capital market opening to make RMB a more globally accepted currency and reduce dependence on USD financing.
Potential impact on markets
  • CNY exchange rate: The impact is likely limited, as the vast majority of FX flows in CNY is by corporates and financial institutions, while individuals’ demand for outflows is limited given relatively strong economic position. As a result, CNY strength is likely to remain until the Fed turns more hawkish or when the USD bear market ends, both still some time off in our view.
  • Equities: Positive for offshore insurance and wealth management, as well as onshore brokers and insurers. But it is likely neutral in terms of overall equity flows, as mainland investors already have access to HK through the equity connect programs, and might not be significant enough for larger markets like the US. Though there may be greater preference for popular consumer brands, electric vehicles and tech names in these markets.
  • Bonds: There may be some attraction towards property bonds where yields can sometimes be higher in HK than on Mainland, depending on the credit policy cycle. But generally speaking, CNY onshore yields are more attractive and familiar to mainland investors than hard currency offshore varieties.
Download: Asia Strategy Bulletin