The Independent reports:

Are we about to see a great wall of Chinese money slam into the world's equity markets?

The Chinese authorities have announced that for the first time, citizens will be permitted to own foreign shares. Given the nerve-shredding gyrations on Western stock markets, that sounds like a good idea. Millions of enthusiastic Chinese share buyers would be very helpful right now, underpinning stock exchanges weakened by our own flight from riskier assets.

It will happen, although it seems, in typical Chinese style, to be something that will evolve slowly rather than burst forth upon the international scene with all the impact of a brightly decorated dancing dragon in a Chinese new year festival. However the longer-term effects will be as dramatic, and, as they say over there, even the longest journey starts with a single step.

The beginnings are modest enough. China's currency regulator, the State Administration of Foreign Exchange, has announced that Chinese citizens with a Bank of China account in the northern city of Tianjin will be allowed to invest in foreign equities under a pilot scheme. The regulator didn't specify an investment maximum, and nor did they say when the trial will start. Purchases will be limited to Hong Kong-listed shares, mostly firmly centred on the Hong Kong/Chinese economy but with a sprinkling of stocks that also offer a wider exposure to the world, such as HSBC and Standard Chartered.

To read more:

http://news.independent.co.uk/business/analysis_and_features/article2891171.ece