China is looking cheap. More specifically, “A” shares are looking cheap. Shares of companies listed on both the Shanghai exchange and in Hong Kong show the A shares near eight-year lows versus their southern counterparts. The discount is 8 per cent; this compared with an average 18 per cent premium over the period. Shanghai A shares’ forecast earnings multiple is 7.5 times; this versus an average of 9.4.

So the Chinese are fleeing their local market? Not necessarily. Last month a reported $91bn was sucked out of the A shares markets, to put on deposit ahead of new listings; three Shenzhen initial public offerings were suspended on the first day of trading after rising over 30 per cent. These were the first listings after a hiatus, during which regulators tweaked rules designed to protect retail investors and restore confidence in IPOs and the broader market. If 120 times oversubscription for the recent IPOs is any measure, it is working.

Regulators are also keen to open up to the outside world. This October, Hong Kong and Shanghai are expected to implement Stock Connect, a system to facilitate stock purchases of Hong Kong stocks by mainlanders and of Shanghai A shares by foreigners. It is less restrictive than predecessor systems qualifying foreign and domestic institutional investors to buy shares each way. It should be popular, especially heading north for retail investors with idle renminbi in HK.