THE proportion of foreign holdings in Chinese stocks currently stands at 5 percent, said a top securities regulator Monday.

Foreign investment in China’s stock markets started to rise rapidly after their shares were included in the MSCI and FTSE indexes, said Fang Xinghai, vice chairman of the China Securities Regulatory Commission (CSRC).

The proportion of foreign holdings in Chinese stocks currently stands at 5 percent, he said in a panel session at the Boao Forum for Asia annual conference 2021.

Foreign investors in Chinese listed firms are still subject to a 30 percent ownership cap and have limited derivatives tools at their disposal in Chinese markets.

China has a shortage of mature value investors and foreign investors will fill the gap, said Fang. He said that the CSRC is paying “close attention” to large inflows and outflows of foreign funds in Chinese stock markets. If a foreign account causes significant fluctuations in China’s stock markets, the regulator would suspend its trading, Fang said.

He said that China would create conditions to attract more foreign investment in equities. The CSRC is confident of keeping China’s capital markets stable as the country opens them up, said Fang, adding that the regulator will take precautionary measures to head off risks.(SD-Agencies)