Chinese mutual funds

["Lisa & Ian Murray" <seamus@xxxxxxxxxxxxx>]

full article http://www.iht.com/IHT/TODAY/FRI/FIN/chifund.2.html

Paris, Friday, September 1, 2000
China Plans to Introduce Western-Style Mutual Funds


Bloomberg News

HONG KONG - China will try to spur its mutual-fund industry as early as next
year by introducing pilot open-end funds, according to government officials
and advisers.
China is tapping foreign companies for advice on the Western-style open-end
mutual funds because its closed-end funds, which trade like stocks, are
proving too volatile.

''The government is looking for aggressive financial reform,'' said Tina So,
a director at Schroder in Hong Kong, which is advising Industrial &
Commercial Bank of China, the nation's biggest bank, about opening an
open-ended fund.

Ms. So said it was not yet clear whether foreign investors would be allowed
to enter the market, which had 29 closed-end funds with about 80 billion
yuan ($9.5 billion) invested at the end of June. She said a lack of clear
investment fund laws would slow the opening of the market.

China will also impose tough new regulations on its domestic financial
industry, which is riddled with corruption, according to Shi Ming Cai,
director-general of the social insurance fund supervision department at
China's Ministry of Labor and Social Security.

Chinese citizens deposited more than 6.3 trillion yuan in savings this year
through the end of July, up 6.3 percent from a year earlier, according to
the People's Bank of China.

With a population of about 1.3 billion, that puts the per-capita deposit
rate at 4,846 yuan.