regulation

With the Chinese government cracking down, foreign investors are reassessing their exposure to China. It is a balancing act between capitalising on the lucrative opportunities the country offers and protecting portfolios against the apparent arbitrariness of the government. The attentive investor can nevertheless hold on to a common thread.

The moment the government starts determining what you are allowed to earn as an investor, it is usually wise to be gone. In Europe, there is more regulation than in the United States. In some cases, such as in the financial sector, there has been de facto nationalisation since the Great Financial Crisis. The average bank employee has to deal with more rules than the average civil servant. 

What can we expect from China’s regulator in the coming period? This is a vital question given the restrictions recently imposed by Beijing in the education sector. Among other things, antitrust risk hangs over the market, with the government trying to address economic dominance.

With a warning against excessive regulation, and a call to action on green investing, CSSF director-general Claude Marx, made a typically colourful intervention at Monday’s virtual ALFI conference. He also gave some details of planned local regulation of teleworking arrangements.