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Tuesday, September 11, 2001, updated at 14:21(GMT+8) | ||||||||||||||
Business | ||||||||||||||
Foreigners Get Ready for Listing in ChinaLeading firms in Japan, Europe and the United States are reportedly preparing to have their units in China go public, possibly as soon as early next year.Anglo-Dutch consumer products giant Unilever and French telecommunications equipment maker Alcatel had incorporated their units in China as joint stock companies in a step to list them on Chinese markets, the Nihon Keizai Shimbun reported. China plans to allow foreign companies to list on its fast-growing stock markets as it pushes ahead with efforts to join the World Trade Organization. Beijing, to announce guidelines on the plan shortly, would initially accommodate only the stocks of foreign-owned subsidiaries operating domestically. It would in future consider letting parent firms of foreign capital list on the markets, in a way similar to the Tokyo Stock Exchange's special section dedicated to shares in companies based abroad, the report said. United States photography giant Eastman Kodak, British bank HSBC Holdings and Hong Kong's Bank of East Asia were preparing to follow suit, as were several Japanese companies, market sources said. According to a draft of the listing guidelines, wholly foreign-owned firms would be allowed to go public, the report said. The firms must retain at least 25 per cent foreign ownership if they are to be recognized as a foreign company and therefore eligible for special tax treatment. They could be listed either on the A-share or B-share markets, the report said. By listing themselves, foreign companies would be able to procure yuan at low cost and enhance their brand-recognition in China, it said. Raising yuan on the stock market was expected to be less expensive for foreign firms than receiving bank loans. The People's Bank of China has cut interest rates several times since 1996 but the rates foreign firms pay to borrow yuan were about one percentage point higher than the interest on dollar loans, a Japanese bank official said in the report. Source: China Daily
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