BEIJING - China may allow foreign firms with investments inside the country to list domestically, as part of efforts to boost trader confidence during the global downturn, an official said Thursday. “We will continue to actively work with relevant authorities to study and complete the policy of allowing foreign-invested companies to list in the country,” Vice Commerce Minister Chen Jian told reporters.
“We will guide high-quality foreign-invested companies to carry out domestic listings at appropriate times,” he said.
China has repeatedly said in the past that it was considering plans to let foreign invested companies sell shares here.
But analysts said such a policy looked more likely this time given the massive impact of the global economic crisis on China, which has seen growth slow to 6.1 percent in the first quarter, the lowest in at least a decade.
Foreign direct investment in China has fallen for an eighth straight month, the first “comprehensive fall” since the 1998 Asian financial crisis as Chen described it, as overseas firms grow more cautious due to the downturn. The latest data show China received $34.05 billion of foreign investment in the first five months of the year, down 20.4 percent from the same period a year ago. n
“One objective with allowing foreign invested firms to list domestically is to boost foreign investment in China,” said Chen Xingdong, an economist with BNP Paribas in Beijing.
Global banking giant HSBC said earlier this year that it “would like to be the first foreign bank to list in Shanghai if the authorities allow it.”
However, Ma Jun, a Hong Kong-based economist with Deutsche Bank, doubted whether industrial firms, in the face of sluggish market demand, would be interested in raising public funds even if they were given permission. “I don’t think the policy will result in excited reactions due to the serious overcapacity problem around the globe,” he said. – AFP.