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China to Allow Direct Foreign Capital into Stock Market After WTO Entry
At the China Securities Market 10-Year Forum held in Beijing on December 16, Vice-Chairman of China Securities Regulatory Commission Gao Xiqing said that impending its WTO accession, China will speed up opening its securities markets to the outside world.
Gao said that the process of opening China's securities market to the outside world includes three aspects: namely, going out to make use of the international securities markets and encourage domestic financial institutions to participate in international competition; inviting foreign firms to China to attract foreign financial institutions and capital to participate in investing in the Chinese domestic market; and comprehensively opening the market to allow foreign enterprises to issue and list securities in China.
The official also briefed on the five near-term tasks for the opening of Chinese securities markets.
First, after China's entry into the WTO, foreign security organizations will be allowed to have seats and make direct dealing in B-share through stock exchanges, and Sino-foreign joint-venture securities management companies and fund management companies are permitted to be established;
Second, China will, as always, encourage more well-performed Chinese enterprises to list abroad;
Third, when conditions mature, China will gradually allow qualified foreign enterprises to issue and list stocks in China;
Fourth, China will actively create conditions for Chinese securities companies in conformity with internal and external legal conditions to set up branches abroad; and
Fifth, at appropriate time, China will permit foreign capital to enter into Chinese securities markets in a controlled and systematic manner.
Enterprises Listed AbroadGao noted that since China experimented with listing stocks abroad in 1993, currently there have been 52 registered inland enterprises issuing and listing stocks abroad, raising funds to the tune of US$17.38 billion.
Among these enterprise, 38 listed solely in Hong Kong, eight in Hong Kong and New York simultaneously, three in Hong Kong and London, one in Hong Kong, New York and London simultaneously and two in New York and Singapore respectively.
Some 68 Chinese shareholding enterprises registered abroad but operate mainly in, and earn their business income from, China's inland, namely the A-share enterprises, listed in Hong Kong, collecting funds to the amount of US$38.14 billion.
Besides, since the first B-share was issued on January 2 1992 in Shanghai, 114 companies had issued B-share and collected US$4.6 billion by the end of last November.
According to Gao, Chinese enterprises, through their entry into the international capital market, have not only raised a large amount of construction funds, but have also improved their own qualities in international market competition.
By PD Online Staff Deng Gang
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