China has in effect frozen a proposal to allow mainland citizens to buy shares in Hong Kong, a decision that threatens to undercut the recent surge in the former colony’s equities market to record highs. Wen Jiabao, the premier, has attached four conditions to final approval for the scheme, all of which are so open-ended that Beijing could take months, if not longer, to permit it to go ahead. His comments cap two months of messy policy infighting over the proposal between rival agencies in Beijing with conflicting interests in management of the country’s financial system. The Hang Seng lost 3 per cent on Monday morning on news of the probable delay, while markets around Asia eased as financial stocks extended the falls from the end of the last week.

This entry was posted by Helen Thomas on Monday, November 5th, 2007 at 5:14 and is filed under Capital markets. Tagged with china. Edit this entry.