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China to push on with opening capital markets to foreign investors

China Securities Regulatory Commission officials point to cross-border cooperation on regulation, and possible expansion of stock connect schemes.
A Chinese national flag flutters outside the China Securities Regulatory Commission (CSRC) building on the Financial Street in Beijing, China, 9 July 2021.
A Chinese national flag flutters outside the China Securities Regulatory Commission (CSRC) building on the Financial Street in Beijing, China, 9 July 2021.

China will further open its capital markets to foreign investors, the country’s top securities regulator said on Monday, adding that it will pursue pragmatic cross-border cooperation to regulate overseas-listed Chinese companies.

Global investors have been spooked in recent months by a flurry of Chinese regulations targeting sectors ranging from technology to private tutoring. US plans to kick noncompliant Chinese firms off American exchanges has fuelled concern.

“Opening-up and cooperation is the inevitable trend in the integrated development of global capital markets,” China Securities Regulatory Commission (CSRC) Chairman Yi Huiman told a conference organised by the World Federation of Exchanges.

China is studying further measures, including expanding the scope of the stock connect scheme linking China and Hong Kong and improving the Shanghai-London Stock Connect programme, Yi said in a speech posted on CSRC’s website.

Meanwhile, CSRC will conduct “pragmatic” cooperation in areas such as supervision of overseas-listed Chinese companies, cross-border auditing, and law enforcement, he added.

Yi said that given interwoven global markets, governments should abandon the mentality of a “zero-sum game”, as companies and investors share both the boom and the doom.

Global financial centres should facilitate cross-border financing, “rather than become the platforms and tools governments use to sanction other countries”, Yi said, without mentioning the US.

Yi’s speech came a day after CSRC vice-chairman Fang Xinghai made similar pledges to further deregulate China’s markets.

China will expand the channels for foreign capital to invest in Chinese securities and futures markets, and will further facilitate the issuance of yuan-denominated “Panda bonds” by foreign institutions, Fang told a separate conference on Sunday.

China will also improve domestic listing rules for overseas entities, as well as regulations on overseas listings of Chinese companies, Fang said in a speech also posted on CSRC’s website.

Fang also vowed to safeguard Hong Kong’s status as a global financial centre, saying that Beijing supports domestic companies listing in Hong Kong.

(Reporting by Samuel Shen and Ryan Woo; editing by Timothy Heritage and Alexander Smith)