China Targets ETFs and Shuts Local Financial Exchanges in Clampdown

China is taking significant steps to regulate its financial sector by targeting domestically focused Exchange-Traded Funds (ETFs) to stem outflow and shutting down local financial asset exchanges in several cities. The closures, part of a nationwide clampdown, are happening in Hunan, Liaoning, Xi'an, and Chongqing. These local exchanges, often seen as hubs for illicit financing, have been identified as risks to the financial system. Originally established by local state-owned enterprises for transactions of local financial assets, these exchanges have increasingly facilitated the sales of banned wealth management products and services for local government private financing.