A more likely effect is that trading volumes will rise because hedge funds and other institutional investors will have a greater incentive to trade once they can hedge their risks. Experiences in other markets, such as Taiwan and Japan, suggest that trading volumes could, in the long term, increase by as much as 50 per cent, according to Morgan Stanley.

But that is by no means a given, especially since trading volumes among Chinese investors are already much higher than those in the west. “In China even institutional investors act like retail investors,” says Mr Lou of Morgan Stanley. “They all talk like Warren Buffett and act like George Soros.”