China to keep offshore listing channels open, accelerate launch of new rules: official
Published: Apr 10, 2022 06:02 PM
File photo shows the entrance of the China Securities Regulatory Commission (CSRC) in Beijing, capital of China. (Photo:Xinhua)

File photo shows the entrance of the China Securities Regulatory Commission (CSRC) in Beijing, capital of China. (Photo:Xinhua)

The head of China's securities regulator has vowed to widen market access while promoting cooperation with US regulators in forging a predictable regulatory environment for listed companies.

China will accelerate the launch of new rules for overseas listings, and maintain a smooth and open flow for the channel, Yi Huiman, chairman of the China Securities Regulatory Commission (CSRC), said during a meeting over the weekend.

Yi's remarks would largely bolster investors' confidence amid recent flare-ups of COVID-19 in multiple regions across China and rising external uncertainties brought by the Russia-Ukraine conflict and China-US audit talks, which are weighing on Chinese stocks, experts said.

China will stick to its pace in opening up the capital market, Yi said, noting that the regulator is ramping up efforts on an array of pragmatic measures like promoting the expansion and optimization of the Shanghai-London stock connect and steadily expanding the two-way opening of commodity and futures markets, enriching the supply of international varieties.

The Chinese mainland's capital market will strengthen pragmatic collaboration with Hong Kong, which will remain the international financial center.

As of the end of March, there were 4,782 domestically listed companies with a total market capitalization of 80.7 trillion yuan ($12.68 trillion), ranking second in the world. 

The number and market value of listed companies had increased by 33.4 percent and 85.3 percent, respectively, compared with the end of 2018, helping to consolidate steady recovery of the real economy, data from the CSRC showed.

For Chinese firms seeking overseas IPOs, the regulator said it will accelerate the launch of new regulations for those firms and keep a smooth channel for them. It will continue to work with US regulators to "establish a predictable international regulatory environment for a capital market of high-quality opening-up," Yi said.

"Yi's remarks, implementing the spirit of last month's financial stability and development committee meeting presided over by Vice Premier Liu He, which vowed to keep the capital market stable, is quite important in further reassuring the capital market, which is conducive to the long-term and healthy development of the A-share market," Yang Delong, chief economist at Shenzhen-based First Seafront Fund Management Co, told the Global Times on Sunday.

The stock market has entered a rebound, with some fluctuations, after a period of declines, according to Yang.

The US Securities and Exchange Commission recently added several US-listed Chinese stocks to its so-called watch list of firms that may be forced to delist, citing the Holding Foreign Companies Accountable Act, resulting in Hong Kong-listed tech stocks suffering a nosedive.

Chen Li, chief economist of Chuancai Securities, told the Global Times on Sunday that strengthening opening-up and reform has always been an important means of building a diversified capital market, by not only attracting overseas investors to come in but also supporting some high-quality companies to go global.

"In the face of newly emerging regulatory issues like listed firms' confidentiality, policies need to be optimized in line with the actual situation, which will help protect the legitimate rights and interests of listed companies," said Chen.

The CSRC announced on April 2 changes to cross-border regulations for offshore-listed Chinese companies in a draft regulatory document addressing confidentiality and document management for overseas listings, which experts said showed China's ongoing efforts to resolve the audit dispute with the US while protecting national data security.

The changes will facilitate "cross-border regulatory cooperation, including joint inspections, which will help safeguard the interests of global investors," the CSRC said.

China has held multiple rounds of frank, professional and productive meetings with the US Public Company Accounting Oversight Board. 

With the ball now in the US' court as China has shown goodwill to remove obstacles allowing for strengthened audit cooperation, the latter should stop its arbitrary long-arm jurisdiction and its crackdown on US-listed Chinese companies, experts noted.