China Set To Overtake Hong Kong In Online Trading?

by Carla Johnson, Investors Offshore.com

12 October 2001

According to new figures released by the China Securities Regulatory Commission (CSRC), online stock trading on the mainland is growing at a rapid pace, with more than 5% of overall stock trade transactions taking place over the internet. In August, the total value of online stock transactions in China amounted to more than 29.5 billion yuan, said the securities industry watchdog, a rise of around 10.9% on the previous month. The CSRC also reported that over the summer, the number of online accounts rose from 2.89 million in July, to 3.01 million in August.

Analysts in Asia have suggested that if these trends continue month on month, China could become the regional leader in this area, overtaking the offshore financial centre in Hong Kong, where the penetration of online trading currently stands at around 5%.

The South China Morning Post recently cited a Pricewaterhouse Coopers report from March which announced that: 'The growth and penetration of the market for internet trading [in Hong Kong]...has not seen the rapid growth it has experienced elsewhere.' Many experts feel that the reason for this lies with the Hong Kong brokers themselves, who have become complacent after long periods of high trading volume in the local markets, and do not feel obliged to become more competitive by examining online alternatives.

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