Modern hedge funds pay more attention to the liquidity of funds because of its high risk and high return. Because China is not freely convertible under the capital account, there are great restrictions on the entry and exit of large funds, so it does not have the policy conditions to develop hedge funds.

In addition, hedge funds invest more in high-risk, highly leveraged financial derivatives. Therefore, according to the actual situation in China, the lack of active derivatives market and rich varieties of derivatives will prevent hedge funds from developing and expanding, so they do not have market conditions at present.

More importantly, according to the relevant laws and regulations of the United States, hedge funds can use bank credit funds to expand leverage, expand income and invest in high-risk markets on a large scale. At present, commercial banks under the control of state-owned system in China are unlikely to lend billions or even billions of funds to hedge funds, and can only rely on their stocks, bonds and other products as collateral for repayment. Therefore, at present, China does not have the business environment to develop hedge funds.

Finally, as investors and beneficiaries of hedge funds, whether the domestic rich can accept the rules of the game of hedge funds and whether the investment amount is their personal after-tax income needs the support of relevant national policies. In America, as a global hedge fund, it has developed the largest and most mature market. Due to the high-risk characteristics of hedge funds in the United States, fund managers often charge 20% ~ 30% of the income in addition to management fees. Moreover, American billionaires often only regard hedge funds as a small part of personal financial planning, and more money may be used to participate in private equity investment, which often depends on the long-term and lasting penetration of American personal financial management concepts, and people's views on the relationship between risk and income will be more mature. After many financial disasters in American history, most rich people will not be as crazy as those in China in 2005-06 when the stock market soared. They tend to choose more rational and diversified investment schemes.

Therefore, no matter from the external environment of hedge fund development or from the internal cost and demand of hedge fund establishment, there is no condition to set up a hedge fund in Chinese mainland at present. In particular, the level of understanding from the state to the people has not yet reached, so there are no hedge funds in China.