| Sumario: | Part of a special section on offshore investment. As a result of research undertaken by the Chinese authorities into the experiences of other exchanges, the stock exchanges in Shanghai and Shenzhen are further advanced from an infrastructural perspective than any counterpart in the region, with the exceptions of those in Taiwan and Singapore. Everything is settled electronically without any physical delivery. According to investors, transaction costs are relatively low because the system has been automated from the beginning. The use of state of the art hardware and software in the operational systems gives a competitive advantage in attracting institutional investors who expect to trade without worrying about the risk of their trades failing. Initial problems with the exchanges have been largely solved by new procedures, with the result that problems that do arise are more related to ancillary matters than to the substantive side of the back office.
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