As news spread on Wednesday that Hong Kong banks were tightening scrutiny on mainland Chinese clients opening savings and investment accounts, Zhe Ye – an auctioneer based in the southwestern province of Yunnan – was stunned.
The former asset appraiser had been planning a trip to Hong Kong to open an account, hoping to buy overseas assets ranging from the Nasdaq and S&P 500 to shares in newly listed companies such as SpaceX.
“I really regret not opening a Hong Kong account earlier,” Zhe said, adding that mainland China’s prolonged stock market downturn over the past decade had eroded his confidence in domestic equities. “Even though A shares have performed better this year, I still remain sceptical about the mainland market.”
Like Zhe, middle-class residents in mainland China have for years used the city as a gateway, opening bank accounts to capitalise on the booming United States and Hong Kong stock markets and to move some of their assets offshore. But that channel is now facing tighter controls, as Beijing intensifies broader curbs on grey cross-border financial activity.
It also asked banks to complete independent reviews of suspicious accounts within three months, identify investment accounts opened with false documentation since January 2023 and suspend transactions where necessary.
