Source: CCTV.com
05-12-2009 14:13
An update on how Shanghai intends to transform itself into a major global and financial center by 2020. This follows a decision reached in March by the State Council's March decision to revitalize the municipality. CCTV correspondent reports on how attention is turning to the Shanghai stock exchange.
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| An update on how Shanghai intends to transform itself into a major global and financial center by 2020. |
Although no timetable has been set for liberalizing China's stock markets, Shanghai's decision to allow qualified overseas firms to list on the Shanghai Stock Exchange, China's largest bourse, is an important move.
But there is one major obstacle in the way of foreign companies wanting to list in Shanghai. The yuan is not freely convertible, making it difficult for firms to switch the proceeds from listing into other currencies.
Hu Xiaolian, head of China's State Administration of Foreign Exchange, says the institute will consider loosening forex controls when foreign companies are allowed to list and trade... but they will also have to consider the overall balance of foreign currency flows.
The Shanghai municipal government also says it will support the issuance of yuan bonds by foreign banks incorporated in China and allow foreign investors to participate in its futures market.
Shanghai will also encourage foreign private equity firms to set up subsidiaries and raise funds in the city.
Fang Xinghai, director of Shanghai's Financial Services Office, says most foreign banks operating in China are eager to raise local funds as their yuan currency savings are very limited, restricting their lending. As these banks are performing well in China, their bonds or stocks are likely to be popular.
Shanghai is also pressing ahead with plans to build an international shipping center, focusing on integrating shipping resources, modernizing related services, expanding logistics functions and standardizing development. The city is considering setting up a pilot shipping zone to explore ways to fulfill its targets.
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Editor:Qin Yongjing
