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China Moves to Open A Share Market to Foreign-funded Companies
As more and more foreign-funded companies show their willingness to list on China's A share market, Vice-premier Wu Bangguo said recently that China is reforming its auditing system in a move to facilitate joint-venture companies to get listed on A share market.
He made it clear that foreign-funded companies would have chances to get listed on China's securities market. Considering foreign capital's desire to enter A share market, Zhou Xiaochuan, Chairman of China Securities Regulatory Commission (CSRC) said that the plan to allow A-share investment by foreign funds would be pursued gradually.
Researchers said that the aforesaid news indicates that China may have planned to allow foreign companies to list on A share market. The model most likely to be chosen is China Unicom. Because first of all, listing of foreign-funded companies can increase the assets quality of domestic stock market and beneficial to its long-term, development. Secondly, China will open this market sooner or later, while selecting China Unicom, a red chip, is easy to explain China's policy, and thirdly, it can also help raise the reputation of the Chinese red chip companies. This move will in turn help stimulate domestic companies to seek list on foreign market, thereby playing a role in attracting foreign funds.
In addition, if China Unicom's List succeeds, this also means the beginning of China's final opening of its capital market and leading foreign exchange rate to be more market-oriented. Though China's Unicom will come across some problems it's still worth of serious consideration.
By PD Online staff member Li Yan
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