Fund manager bets on Qianhai

By Cong Mu Source:Global Times Published: 2012-10-18 23:25:25

Wang Yawei, a former star fund manager with one of the largest mutual funds in the country, China Asset Management Co (China AMC), has registered a private equity firm in Qianhai, a financial reform test zone in Shenzhen, a local official told the Global Times Thursday.

A registration record filed with Shenzhen's Market Supervision Administration showed that Wang registered a company called Shenzhen Qianhe Capital Management Co in the Qianhai test zone on September 26.

"Yes, he is (the former China AMC fund manager)," Cao Hailei, office director of Qianhai Shenzhen-Hong Kong Modern Service Zone Administration, told the Global Times Thursday.

Wang had worked at China AMC for 14 years, the longest-serving fund manager in China, before he quit for personal reasons on April 28. Most of his funds recorded stellar net asset value growth, according to the China Galaxy Securities Fund Research Center.

Fund managers and PE investors have been attracted to Qianhai mainly because of its favorable policies in terms of capital accounts and taxation. Qianhai was designated by the State Council in July as the only destination for offshore yuan to flow back freely to the Chinese mainland, and branches of Hong Kong-based banks in the zone are allowed to issue yuan-denominated loans.

Meanwhile, the corporate income tax rate has been lowered to 15 percent from 25 percent in the zone, and personal income taxes for high-caliber financial professionals will also be lowered to a level that can match overseas rates, Cao said

Foreign executives in the mainland need to pay personal income tax of up to 45 percent, whereas those in Hong Kong pay a maximum of 17 percent.

The regulators are still studying the details of how offshore yuan will flow back to Qianhai and what the exact personal income rate should be, and "there is no timetable," said Cao.

"Qianhai should be considered as an extension of Hong Kong's financial territory," said Luo Yuding, a finance professor at Shanghai University of Finance and Economics.

Luo said that, owing to financial stability concerns, the government will probably only implement a partial capital account opening-up in Qianhai.

Betting on appreciation of the yuan and a stronger Chinese economy, many Chinese companies have stopped holding their overseas revenues in dollars and started to convert them into yuan, Dariusz Kowalczyk, a senior economist at Crédit Agricole CIB, told the Global Times.

"China is not at risk of a hard landing. It is very positive for all risk assets," Kowalczyk wrote in a research note Thursday.



Posted in: Companies

blog comments powered by Disqus