China’s stock exchanges, Shanghai and Shenzhen, can be hard nuts to crack—at least for anyone who is not Chinese. H-shares, shares of Chinese companies traded on the Hong Kong Stock Exchange, are attracting increasing interest from foreign investors. They are inexpensive at the moment compared to China’s A-shares, but that shouldn’t last much longer—now may be the time to act.
According to the World Federation of Exchanges, China’s stock markets currently account for 10 percent of the total market capitalisation of all exchanges in the world, and hold an even greater share in terms of market turnover.
In June, two European countries welcomed two Chinese banks as their official clearers for renminbi-denominated trades. In the UK it was the China Construction Bank and in Germany the Bank of China, respectively the second-largest and the largest Chinese financial institutions designated by Beijing to act as renminbi-clearers.
Being the official currency of China, the renminbi is considered legal tender around the country except in Macau, Hong Kong,…