A groundbreaking scheme to allow mainland residents to buy Hong Kong stocks has officially been abandoned, nearly two and-a-half years after it was announced, the Financial Times reported. The State Administration of Foreign Exchange said the “through-train” proposal was one of 19 no longer valid because they had expired. In the three months after the scheme was first announced in August 2007, the Hang Seng Index rose 55% to 31,638 points, which is still its record high. However, in November of that year Premier Wen Jiabao attached several conditions for final approval, effectively shelving the proposal. “No one believed the through train would come. There were too many problems such as capital controls and foreign exchange. I think China prefers other means such as QDII for capital outflow,” said Timothy Fung, China equity strategist at Credit Suisse private banking. Approvals for funds under the Qualified Domestic Institutional Investor scheme resumed last October following a 17-month hiatus.
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