Heather McLean
Heather McLean

Regional e-FX Perspective on China

China is the word on trembling lips across the world. This enormous market is opening up and expanding, getting online and learning how to take advantage of its mass and its closeted economy, to make money on an ever-grander scale. From the eFX perspective the country has just started making tentative inroads. The Chinese government has a strong grip on the country’s finances and information circulation. It is learning to relax that hold and to allow electronic trading to take place, yet this is just the beginning of that process; for eFX to really be able to take off in China, the government needs to place more trust in people and systems.

First Published: e-Forex Magazine 31 / Regional eFX Perspective / April, 2008

China has come a long way in eFX over the past four years. Hosan Chan, the manager at Fortune Free Holding, says that in 1994, the central bank, which is the People’s Bank of China, and the State Administration of Foreign Exchange (SAFE) clamped down on all margin trading activity in China. She says that is because many investors lost a lot of money on the market due to poorly judged risk management. As most of these investors were state owned banks, organisations or enterprises, the central bank and SAFE acted quickly. Chan says FX then disappeared from the Chinese market. However, she states that the situation has greatly improved in more recent times. Chan claims all the evidence is indicating that after over 10 years in exile, FX has come back to the Chinese market, sneaking in the back door and making itself known gradually. “A lot of major market makers and brokers have been promoting their activities in mainland China in FX,” Chan comments. “Most of the investors...continued

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