China to hit unregulated hedge fund black market

The Chinese government is set to crack down on an $80bn market in underground hedge funds in the wake of a financial crisis that has damaged state banks.

The country's huge market in unregulated funds has provided a means for Chinese wealthy individuals and corporations to take market bets in the new issues market, according to Mark St Giles, partner at Cadogan Financial, a consulting firm in the development of asset management in emerging markets worldwide.

The funds had until recently produced