A lot of first steps coming out of China of late [Sep 8, 2009: China to Issue Renminbi Bonds to Offshore Investors] - yet another interesting one just announced. With the high savings rate and wealth of the Chinese people (along with the indexes surging each time China turns on the loan spigots) I'd expect multinationals to leap at this opportunity to tap a new avenue of capital.

Now the ultimate step will be when China allows its multiple markets to be fully open to foreign investors - and allows shorting within its market. Then perhaps the great discrepancy between company values in the Chinese indexes versus Hong Kong would go away and their markets would take on more of a rational sensibility. [Oct 13, 2007: Shanghai the Mystical Land of Premium Valuations]

Baby steps for a growing giant... via Financial Times

  • Beijing will finally start allowing foreign companies to list in China, reflecting its ambitions to open up the country’s financial sector and transform Shanghai into an international financial centre.
  • “I think some time early next year we will have one or two foreign companies listed on the Shanghai Stock Exchange,” Fang Xinghai, director-general of the Shanghai government’s Financial Services Office, told the Financial Times.
  • “Very likely, the Shanghai Stock Exchange will get an international board, and [foreign companies] would be subject to a different set of listing rules, which would suit foreign companies and which would also make sure that there will be adequate information for Chinese investors.”
  • Mr Fang added that the establishment of a separate board was designed to circumvent the problem foreign companies tend to have with China’s strict disclosure rules.
  • There will not be dozens and dozens of foreign companies in the short term, but things will be done in a gradual fashion.”
  • Some multinational companies have also signalled that they would be interested in issuing shares in mainland China. “We will definitely want to do it,” Stephen Green, HSBC’s chairman, said at the bank’s first-half results conference in Hong Kong last month. “That is the strategic statement that we’d like to make.”