The road less travelled

Author: | Published: 11 Jul 2011

The vast majority of the world's largest corporations have already established their presence in China through joint ventures, direct investments, sales networks and various other means. Now they are also looking to China for financing their Chinese operations.

Unfortunately, access to China's capital markets, particularly its stock markets, is limited for foreign corporations. First, only companies incorporated in China are eligible for listing on China's stock markets.

Second, financing Chinese ventures directly through China's stock markets is made difficult by stringent listing and post-listing requirements of China's stock markets, especially with respect to financial criteria. Therefore, companies wishing to finance their Chinese ventures are well advised to consider alternative means.

As a general rule, offering and selling securities in China is subject to registration with and approval by the relevant Chinese authorities. In accordance with the China Securities Law, securities consist of shares, bonds, investment fund units and securities-related derivatives....