China’s Ministry of Commerce has proposed to revise rules for foreign investors making strategic investments in Chinese listed companies, and it is seeking public opinions regarding the new rules.
The revised rules will allow foreign strategic investors to sell their stakes 12 months after they make an investment, while the current rules require investors to hold on to their investment for at least three years.
Also, the new rules lower financial requirements for foreign investors, asking for a minimum total assets of no less than US$50 million, or asset under management (AUM) of no less than US$300 million. The current rule requires minimum total asset of US$100 million, or minimum AUM of US$500 million.
Liu Xiangdong, an analyst at China Center for International Economic Exchanges, told Chinese local media that, amending rules for foreign investors is China’s move to further its opening, to make sure investors abroad and at home are treated equally.
He said the move will benefit Chinese listed companies as it facilitates foreign investors’ investment and promotes diversified shareholder structure for listed companies.
In the first half of this year, a total of 29,591 foreign-invested enterprises were established in China, representing a 96.6% growth compared with the same period in 2016, using foreign capital of RMB446.3 billion (US$65 billion), according to data from Ministry of Commerce.
The Ministry of Commerce welcomes public comments on the proposed rules until August 29.
Source: China Money Network
