China's main stock exchange plans to launch an international board next year that would allow foreign companies to sell shares denominated in Chinese currency for the first time, a strong move to promote yuan as a more global currency, local news said.
City government is supporting the Shanghai Stock Exchange effort to attract overseas companies to float shares on the local bourse, Shanghai Daily reported on Thursday, citing Shanghai Mayor Han Zheng.
Shanghai Stock Exchange is working on the board and the board is expected to be launched next year, according to Tu Guang shao, the deputy mayor of Shanghai.
The measures Shanghai has taken in financial innovation and its efforts to become a more sophisticated financial market are all centered on boosting the position of the yuan and promoting its use in many business and financial transactions, Han said in a Bloomberg News interview on Wednesday in Shanghai.
The State Council in March said it planned to make the city a major international finance and shipping hub by 2020 to take advantage of China's economic strength and the yuan's global position.
In July, Shanghai was among five Chinese mainland cities to participate in a trial allowing approved companies to settle international trade transactions in yuan.
A listing on a Chinese stock exchange could help foreign companies by allowing them to tap China's huge pool of savings and by raising their public profile.
China keeps its financial markets isolated from global capital flows and foreign companies are not allowed to trade on its two stock exchanges.
Regulators have yet to issue rules on how foreign companies might be allowed to gain a place in its exchanges.
Shanghai is the world's best-performing stock market this year, with its benchmark index up nearly 90 percent, Associated Press said.
The British bank HSBC is vying to become one of the first foreign companies to go public on China's mainland and plans to raise US$7.3 billion on a new international board.