Premier Wen made his announcement during a visit to Uzbekistan, saying that the government needed to study the possible effects of the so-called 'through-train' on stock markets and the possible risks for Chinese investors.

In the early fall, it seemed as though the Beijing government was going to allow direct investment in Hong Kong H-shares with the 'through-train' scheme, but delays to that project have switched investor interest back to the QDII route.

More than US$40 billion has been offered to QDII fund launches in just the last month, according to China's State Administration of Foreign Exchange, and Western analysts say that more than US$100bn could flow through QDII funds towards Hong Kong next year.

Even though Hong Kong's market has appreciated nearly 50% this year, it is seen as being a conservative play by mainland investors, faced with the frothy Shanghai market, up five times in the last year.

There may be political reasons behind Beijing's caution. Despite explicit support for Hong Kong during the recent party congress, Beijing maintains an ambivalent attitude towards the SAR's exchange, and the power shift that was hinted at during the Congress may have seen the liberalizing tendency lose some of its steam.

Chairman of the State Assets Supervision and Administration Commission Li Rongrong told reporters that Chinese companies would still be encouraged to list in Hong Kong, but that the market needed to 'improve' itself. 'We are continuing the arrangement for companies to be listed in Hong Kong,' he said, adding: 'We only encourage them. The ultimate decision lies with the companies.'

Li may have meant that the 'red-chip' market should somehow be opened to Chinese investors. Red-chips (or H-shares) are companies which incorporate and list outside China, and there have been complaints from Beijing about the exclusion of mainland investors from such stocks.

Li said he thought that the red-chip problem would be resolved in the near future, although it doesn't now seem likely that he was referring to the 'through-train'.

"The return of red-chip companies would require endeavour from both sides - not only us but also Hong Kong," he said. "Our co-operation has reached a certain level now. I believe this difficult problem will be resolved soon."

A year ago, Hong Kong seemed set fair to reap a major crop of Chinese IPOs in 2007, but the reality has been that new share issues on the mainland will top US$100bn this year (25% of the world's total) while Hong Kong has pulled in just US$6bn so far, although Alibaba.com's IPO last week added up to US$2bn to this total.

Bizzarely, the mainland is said to have been buying shares in HKEx at the same time as leaning on major companies to list in Shanghai rather than in Hong Kong. Beijing, it seems, doesn't want Hong Kong to become too powerful; but at the same time it knows Hong Kong can't be kept down.

Chinese officials deny, meanwhile, that they have been putting money into Hong Kong Exchanges and Clearing (HKEx), which operates the territory's stock exchange, although Hong Kong insiders said there unmistakable signs that it was happening. They believe that newly-formed state investment company CIC, which has been given $200bn to play with by Beijing, will plough much of this money into Hong Kong assets.