China's Banking Regulatory Commission last month announced plans to form a special committee to look into hedge funds to determine how difficult it would be to regulate them, should the country allow them. Now, Jeffrey Tucker, founding partner of Fairfield Greenwich Group says it's just "a matter of time" before the Mainland welcomes the hedge funds, as there are signs China may be shattering its HF taboo, born of the belief that hedge funds were largely responsible for the Asian financial crisis a decade ago. One sign of changing times is that China is planning to launch a financial derivatives exchange in Shanghai, which would give investors a place to hedge their exposure, and may open the door to hedge funds as the government marches toward greater financial market liberalization. Tucker is also trying to taking the edge off hedge funds with a little public-relations tour of Beijing and Shanghai with top honchos from his firm as they aim to educate the government and investors about hedge funds. "A misconception about hedge funds is the idea that all of them see huge returns and do so by taking huge risks," Tucker told China Daily. He goes on to say that most hedge funds avoid risk with 85% of them maintaining 1:1 leverage and only 2% reaching 5:1. Tucker also sings the praises of hedge funds, namely that they add liquidity and foster better market efficiency.