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Liu Mingkang has suggested the through train is on the wrong tracks |
The plan was first launched in August by Beijing’s FX regulator, Safe. Hong Kong stocks predictably soared, on the expectation that the local bourse would soon be flooded with capital from China’s estimated $2.7 billion household savings. A few weeks later, China’s bank regulator, Liu Mingkang, said that he didn’t much like the idea of Chinese capital leaving the country, suggesting the "through train" was on the wrong tracks.
Oddly, Hong Kong stocks soared some more, clearly suggesting that local investors thought he must be having them on. In the 10 weeks from Safe’s announcement to November 2, the Hang Seng index had managed to jump 54%, ending that day at an all-time high of 31,361. The next day, the through train jumped the tracks, after Chinese premier Wen Jiabao suggested that the plan would probably be delayed. Stocks plummeted, falling to below 28,000. At that point, Hong Kong Exchanges and Clearing chairman Ronald Arculli leapt predictably into the fray, throwing out transport clichés left, right and centre.
