Fingers on the button

Asian investors had their fingers on the panic button yesterday (join the club pals). Hong Kong’s Hang Seng Index closed below 16,000 points for the first time in two years on Wednesday, dropping 8.17% to 15,431.73. The mainland was hardly immune from the selloff mania as the Shanghai Composite Index also dropped by 3% to 2092.22. We’ll have to wait a day to see how investors respond to China’s latest moves to boost financial markets, but no one can blame mainland policymakers for sitting on their hands. The People’s Bank of China (PBoC) yesterday cut interest rates and banks’ reserved requirement ratios for the second time in a month. In doing so the PBoC joined a global effort that included central banks from the US, euro zone, UK, Canada, Switzerland and Sweden, marking the first time China has changed interest rates the same time as other central banks. That’s what we call cooperation! But China isn’t going to give its foreign friends a free ride. China’s securities regulator has asked joint venture fund management companies to report on how their overseas shareholders have been affected by the global financial turmoil. Analysts were worried that problems overseas might undermine confidence in these fund management firms or even cause foreign shareholders to pull out of the joint ventures. On the silver lining side of things, China’s farmers may receive some succor a la the Communist Party. A plan allowing farmers to trade their land titles will come under discussion today at a meeting of Party leaders, in what could amount to one of the most significant policy changes in 30 years and a potential precursor to private ownership.