China Open Capital Markets for Foreign Investors

September 07, 2021

China’s top securities regulator said on Monday that the country will continue to open its capital markets to foreign investors, and that it will pursue pragmatic cross-border cooperation to regulate overseas-listed Chinese companies. A flurry of Chinese regulations targeting sectors ranging from technology to private tutoring insert global investors in recent months. Concerns have been raised about the US’ plans to delist non-compliant Chinese firms from American stock exchanges.

Chairman Yi Huiman of the China Securities Regulatory Commission (CSRC) said at a World Federation of Exchanges conference that “opening up and cooperation is the inevitable trend in the integrated development of global capital markets.” According to Yi, China is considering additional measures, such as broadening the scope of the stock connect scheme linking China and Hong Kong and improving the Shanghai-London Stock Connect program.

Meanwhile, the CSRC will engage in “constructive” collaboration in areas such as oversight of Chinese companies listed abroad, cross-border auditing, and law enforcement. Governments should abandon the mentality of a “zero-sum game” because companies and investors share both the rapid growth and the doom, according to Yi. Global financial centers should facilitate cross-border financing rather than serve as “tools and platforms for governments to sanction other countries,” according to Yi, who did not mention the US.

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