Zetland Group Report: China Raises Threshold for Hong Kong Investors in Its Commercial Sector

With a finger on China's economic pulse, Zetland Financial Group reports that Beijing has raised the bar on investment in the mainland's commercial sector for the special administrative region of Hong Kong.

Hong Kong (PRWEB) January 24, 2008 -- China's government has raised the level of investment in its wholesale and retail sectors for investors from its special administrative region Hong Kong, global financial consultancy Zetland Group reports.

The supplementary provisions are directed in the newly promulgated Catalogue for the Guidance of Foreign Investment Industries, which sets out strict restrictions on foreign investment in China's commercial sector.

Under the new guidelines, Hong Kong-based companies operating more than 50 shops on the mainland are now allowed to hold majority shares with an equity ratio of up to 60%. The regulation applies to firms that deal in books, newspapers, magazines, drugs, pesticides, chemical fertilizers, grain, vegetable oil, edible sugar and cotton, with the commodities representing different brands and coming from different suppliers.

"The new supplementary provisions have raised the threshold for Hong Kong companies investing in the mainland commercial sector," notes the HK Productivity Council in a report carried on Zetland's website.

"It can be seen that the state (China's government) is still giving special preferential treatment to Hong Kong investors while restricting foreign investment," it said.

Meanwhile, China has also eased a ban on foreign investment in its securities industry, after Beijing announced new rules that allow single foreign investors to buy up to 20 percent of Chinese securities firms.

Currently, total foreign ownership is limited to 25 percent and securities companies must have at least one Chinese owner who holds 33 percent or more. Chinese regulators banned foreign investment in domestic securities houses in 2005, when Beijing began overhauling the brokerage sector.

Hong Kong-based Zetland Financial Group - http://www.zetland.biz - provides an array of detailed financial analyses on its website each month. Since 1987, Zetland's professional consultants have tackled a range of business issues - from investment opportunities to jurisdictional changes in legal, tax and accounting matters - for clients around the globe.

Zetland employs experienced individuals including qualified lawyers, accountants and company administrators, and maintains a worldwide network of banking and finance associates, professional advisers, correspondents and local agents.

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