China has stepped up plans for liberalising its market, after reports reveal that the country is to allow foreign hedge funds to tap into its wealthy citizen base.
In a move that will dismantle regulations that have previously prevented foreign players accessing domestic investors, the reforms will mean these firms will be able to access domestic investors looking to invest into funds overseas.
The new mechanism will be called the Qualified Domestic Limited Partner programme and will have an initial investment ceiling of $5bn. The government will invite hedge funds to apply for licenses to register in Shanghai. Sources say that there is already a waiting list.
The reform is the latest significant step that China has taken this year, in aggressively moving towards deregulating its market and making it more open to foreign participants.
It has already shocked the market with two interest rate cuts in under a month and it has boosted the quota for qualified foreign institutional investors by 166 percent this year.
Written and Presented by Lianna Brinded.