In the News: Shanghai-London Stock Connect; China-Singapore FTA; and Protection for Entrepreneurs
November 13, 2018 | BY
Jacelyn JohnsonTop CSRC official said Shanghai-London Stock Connect will launch by year's end; China and Singapore sign agreement to upgrade Free Trade Agreement; and the Supreme People's Court plans new guidelines to separate commercial disputes from economic crimes.
Shanghai-London Stock Connect to Launch Soon
China Securities Regulatory Commission (CSRC) vice chairman Fang Xinghai recently said that the Shanghai-London Stock Connect Program is expected to launch by the end of this year, as part of China's efforts to further accelerate the opening up of its capital markets. This scheme will allow stocks listed in London and Shanghai to be traded in each other's markets using depository receipts.
The Shanghai-London stock connect scheme will allow London-listed companies to issue Chinese Depository Receipts (CDR) in Shanghai backed by existing shares, while Shanghai-listed companies may issue Global Depository Receipts in London.
According to CSRC's new guidelines, which was issued in October this year, London-listed companies have to ensure at least Rmb20 billion in market capitalization in order to qualify. The guidelines also stated that investors must have more that Rmb3 million of equity assets to be able to trade CDRs.
The CSRC has established a strong cooperation with securities regulatory bodies in Hong Kong and Singapore, which has created a conducive environment for Chinese companies to raise fund in foreign markets. The Shanghai-London scheme follows two similar trading links, the Shanghai- Hong Kong Stock Connect and the Shenzhen-Hong Kong Stock Connect.
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China and Singapore Cooperates on Upgrading Free Trade Agreement
China and Singapore, on November 12, signed a cooperation agreement to upgrade their Free Trade Agreement (FTA) which will boost free trade, investment and regional cooperation between the two countries, reported Xinhua.
Among the notable pledges between the two countries were the building of the New Land-Sea Corridor which will consist of cargo routes by land and sea, connecting China to Southeast Asia. Both nations are also looking to actively increase collaboration on smart-city building and development of artificial intelligence. The enhancement of the FTA would be beneficial on trade and investment between people and companies of the two countries.
Chinese Premier Li Keqiang and Singaporean Prime Minister Lee Hsien Loong also signed cooperation documents on boosting connectivity, finance, science and technology, environment and culture and customs between the two countries.
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SPC to Enhance Protection of Entrepreneurs
In an effort to strengthen and protect the personal safety and property security of entrepreneurs and private enterprises, the Supreme People's Court (SPC) is looking to draft new judicial interpretations that will provide local courts with specific guidance to prevent them from handling civil economic disputes with criminal punishment.
Jiang Bixin, vice-president of the SPC said that judicial departments must strictly and accurately distinguish economic disputes from economic crimes, and that private entrepreneurs should not be criminally penalized if their innovations in fundraising, operations or production do not breach criminal laws.
Chinese courts have recently been subject to wrongfully decided cases, in which the legitimate property rights of enterprises were infringed upon. Among the more notable cases were Wumei Holdings' Zhang Wenzhong's conviction, which was thrown out this year after a retrial.
The Chinese government has said that protecting property rights and private economy has been a major task for the courts, and loss of state-owned assets and maintenance of public interest should not be used as an excuse to infringe upon the legitimate rights of entrepreneurs or private enterprises.
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