Listing Rights Extended for Foreign Investment Enterprises

The PRC government has taken an important step in opening its capital markets. Foreign-funded companies limited by shares can now launch their own public offerings.

When the Chinese stock markets were  established in the early 1990s, they were  principally used to raise capital for State-owned enterprises. Only a small portion of the quota for initial public offerings (IPOs) was allocated to privately held Chinese entities.  While there was no specific prohibition against public offerings by foreign investment enterprises (FIEs) on the Chinese stock markets, there was no real way for these enterprises to do an IPO as the listing rules were designed for domestically invested enterprises.  With the exception of a few foreign investors who purchased large interests in listed domestic companies, the Chinese stock markets have, to date, been limited to Chinese-sponsored companies.