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China to Gradually Allow Foreign Enterprises to Get Listed on A-share Market
As more and more foreign-funded enterprises have shown intention to seek listing on the A-share market, vice premier Wu Bangguo said recently that China has committed itself to the reform of the examination system, and there are already some joint-venture enterprises having got listed on China's capital market. He said China will give support to joint-venture enterprises to get listed in the mainland in accordance with the actual situation, clearly expressing that joint-venture enterprises will have opportunities to get listed on the Chinese stock market.
Regarding the entry of foreign capital into the A-share market, Zhou Xiaochuan, chairman of China Securities Regulatory Commission (CSRC), once said CSRC is now drafting the regulations for the introduction of foreign institutional investors in hopes to open the A-share market to foreign capital step-by-step and within limits, including allowing foreign-funded enterprises to get listed on the A-share market.
Researchers believe that all these information shows China may really plan to take some action in allowing foreign capital to enter the A-share market. The breakthrough may lie in the approval of the listing of China Depository Receipt (CDR) of China Unicom. The reasons are: first, the listing of foreign-funded enterprises will improve the quality of the assets of the domestic stock market and will be conducive to the long-term development of the stock market; second, foreign-funded enterprise will be allowed to get listed on A-share market sooner or later, and it will facilitate the explanation of polices and the implementation of the promise on the listing of foreign-funded enterprises to select China-funded red-chips as the starting point; third, the domestic listing of foreign-funded enterprise may raise the price level of China-funded red chips and balance and give spur to the rise of the prices of their foreign shares. Moreover, the decision will, in turn, stimulate the international market and result in the listing of even more domestic enterprise on the overseas market, helping to introduce foreign capital in another way.
Besides, if the listing of CDR is successful, it will mean the start of a series of actions for the final opening of China's capital market and the marketization of foreign exchange rate. Although there still exist some problems for the domestic listing of China Unicom, the event is noteworthy itself.
Source: Panorama
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