Top US quant teams unable to beat native competitors in mainland China unlike in Japan or India, despite regulatory clampdown on trading
3-MIN READ3-MIN ListenDaisy WuPublished: 1:00pm, 12 Aug 2026China’s quantitative funds have built trading strategies so closely tailored to the mainland market that foreign rivals cannot replicate them, even as a regulatory clampdown on trading speed reshapes the industry, according to a prominent economist.“If a top US quant team goes to Japan or India, they can beat virtually all the native quants,” Xia Chun, founder and chief economist at Chinese financial research firm Wiselink Group and former finance professor at the University of Hong Kong, told the South China Morning Post this week.
The reason, Xia said, lies in China’s unique valuation logic for state-owned enterprises, whose state-backed financing advantages create pricing dynamics that traditional foreign models fail to capture.
Frequent administrative policy interventions such as initial public offering suspensions and policy-driven trading halts become trading signals that outside models struggle to replicate, he added.
The comments from Xia, who has also advised the China Securities Regulatory Commission (CSRC), came as Beijing tightens its grip on the quant trading industry. On the night of July 31, stock exchanges in Shanghai and Shenzhen cut the dedicated local-network queues that let quant funds’ co-located servers receive price feeds tens to hundreds of microseconds ahead of other participants.
