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China wants to open capital markets to foreign investors

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

FILE PHOTO: A Chinese national flag flutters in front of the China Securities Regulatory Commission (CSRC) building on Financial Street in Beijing, China, July 9, 2021. REUTERS / Tingshu Wang / File Photo

Global investors have been terrified in recent months by a deluge of Chinese regulations targeting sectors ranging from technology to private tutoring. US plans to evict non-compliant Chinese firms from American exchanges have fueled concern.

“Openness and cooperation are the inevitable trend in the integrated development of global capital markets,” said Yi Huuiman, chairman of the China Securities Regulatory Commission (CSRC), at a conference organized by the World Federation of Exchanges.

China is considering other measures, including expanding the scope of the Stock Connect program, which connects China and Hong Kong, and improving the Shanghai-London Stock Connect program, Yi said in a speech on the CSRC website.

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

Yi said that with global markets intertwined, governments should give up the “zero-sum game” mentality as companies and investors share both the boom and the doom.

Global financial centers should facilitate cross-border financing “instead of becoming platforms and tools that governments use to sanction other countries,” said Yi, without mentioning the United States.

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

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

China will also improve domestic listing rules for foreign companies as well as rules on foreign listing of Chinese companies, Fang said in a speech also posted on the CSRC website.

Fang also pledged to protect Hong Kong’s status as a global financial center, saying Beijing supports domestic companies listed in Hong Kong.

Reporting by Samuel Shen and Ryan Woo, editing by Timothy Heritage and Alexander Smith

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