The Chinese government has uncovered almost $10 billion in fraudulent trade, which has led to the drop in China's stock in Hong Kong. Asia's largest coal producer, China Shenhua Energy Corporation, dropped 1.3 percent after the China Securities Journal announced that the government is allowing four nuclear power plants to be constructed. 

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The Shanghai Electric Group of Companies, which makes the generator equipment used in nuclear power plants, benefited from this and saw their stocks increase by 10 percent, the daily limit in Shanghai.

Hang Seng China Enterprises dropped 0.7 percent to 10,640.09 when the market closed. H shares have been falling because of the arising investor concerns over China's economy. Companies have reportedly faked, reused, and forged documents used for imports and exports. 

These trades have increased the number of channels that criminals can use, as well as provided pressure from hot money inflow. Wu Ruilin, a deputy head at the State Administration of Foreign Exchange's inspection department, said that those involved in fraud would be punished.

Goldman Sachs Group Inc. cut its economic expansions target (2015) for China to 7.1 percent from the previous 7.6 percent, but kept this year unchanged at 7.3 percent. The H-share gauge has dropped 1.6 percent this year and is valued at 6.8 times its projected 12-month earnings. 

On the other hand, Shanghai Composite has risen 11 percent and trades at 8.5 times. Shares in Shanghai have recovered before an exchange link with Hong Kong that starts in the next month. 

This will allow 23.5 billion Yuan, or $3.8 billion, of daily cross border purchases. China is depending on the link's success to help liberalize their financial system, give its citizens more investment channels, and increase the role of the Yuan even if the property market is slumping and risks from the local wealth management products have been increasing.

According to official securities data, A-share accounts containing assets went up by 158,000 to 52.5 million in Sept. 19. Investors opened roughly 217,000 new accounts in the period, which has been considered as one of the most successful periods in more than two years. 

TagsBNP, china h shares