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Stock Market Welcomes Overseas Capital
In a milestone step designed to further open the domestic stock market, China plans to launch a full package of new policies aimed at encouraging foreign investors to get involved in China's fledgling stock market.
These measures include allowing foreign investors to trade B shares directly through special seats at the bourses in Shanghai and Shenzhen, said Gao Xiqing, vice-chairman of the China Securities Regulatory Commission, watchdog of China's securities industries.
The move will serve as a major engine to fuel a bullish performance on the B-share market, a market reserved specifically for foreign investors but which has remained stagnant for years, since its debut in early 1992 because of shortage of funds.
To date, 114 domestic companies have been listed on the hard-currency dominated B-share market and have raised a total of US$4.36 billion for their business expansion.
The Chinese Government is also to give the green light to the establishment of joint venture companies involving domestic and foreign securities and fund management firms, around the time of China's accession into the World Trade Organization(WTO), said Gao.
Until that move is made, foreign securities and fund firms will remain strictly barred from any direct involvement in China's stock market.
"It is obvious that our co-operation with the international giants will bring in a lot of advanced technologies and management expertise," said Wang Kaiguo, president of the Haitong Securities Co, billed as the second largest securities firm in China.
"The regulators are now in the very active stage of adjusting and revising the relevant laws and regulations for this major reform," said Gao on Saturday.
Speaking at a forum marking the 10th anniversary of the opening of China's stock market, Gao said the regulators will also encourage foreign-funded firms and Sino-foreign joint ventures to go public and raise funds on the domestic stock market.
Early reports claims that a number of foreign-funded firms, such as Unilever, have already shown strong interest listing in the domestic stock market, but they are still waiting for a go-ahead from the authorities.
The government is also scheduled to loosen its rules governing majority control joint venture financial institutions launched on domestic market, and foreign companies may be able to hold a much larger share in such joint ventures.
However, Gao did not give a clear timetable for the debut of these measures, although he stressed that it would be a gradual, step-by-step process, to avoid possible financial risks. (China Daily)
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