Foreign Firms Are Welcome to Issue CDRs in Shanghai, PBOC Ex-Governor Says
Zhang Yuanke
DATE:  Jun 09 2023
/ SOURCE:  Yicai
Foreign Firms Are Welcome to Issue CDRs in Shanghai, PBOC Ex-Governor Says Foreign Firms Are Welcome to Issue CDRs in Shanghai, PBOC Ex-Governor Says

(Yicai Global) June 9 -- Overseas companies are welcome to list Chinese depository receipts in Shanghai, according to the country’s previous central bank governor.

“Shanghai will allow foreign enterprises, especially high-quality companies from countries along the Belt and Road Initiative, to raise funds and list on the Shanghai stock market through CDRs and other means,” Zhou Xiaochuan said yesterday in his keynote speech on the opening day of the 14th Lujiazui Forum in the city.

China’s economic cooperation and free exchange with countries along the BRI will become important, but some promising firms in these countries may lack channels for listing, Zhou said.

He was governor of the People’s Bank of China from December 2002 to March 2018, making him its longest-serving head, and was chairman of the China Securities Regulatory Commission before that.

Policy adjustments are still needed to make it possible for foreign companies to list in Shanghai, Zhou said, but the potential is great and it would also benefit the city’s efforts to transform itself into an international financial center.

Overseas participants in this transformation are welcome to help raise standards and promote the integrated development of onshore and offshore markets, he added.

Zhou also pointed out that to further consolidate the status of Shanghai as an international financial center efforts should be made to open up major products in the capital market.

“For example, further market opening in stocks, bonds, foreign exchange, credit loans, and payments will require a significant increase in the free use of the yuan, an increase in the yuan’s convertibility, and further reform of the foreign exchange management system,” he said.

But free use does not mean the yuan would be 100 percent convertible, Zhou pointed out. There are international laws against money laundering, terrorist financing, cross border fraud, as well as arms and drug dealing, he noted, adding that China also has a rule to curb cross-border gambling.

When the yuan’s free use and convertibility are achieved, issues such as the balance of payments and exchange rate formation regime should still be the focus for policy makers, Zhou said. If these issues are dealt with properly, efforts to build Shanghai into a global financial center will jump to the next level, and the yuan’s international status will also gain, he added.

Editors: Tang Shihua, Futura Costaglione

Follow Yicai Global on
Keywords:   IPO,CDR,Oversea Enterprise,International Financial Center,Financial Market Openness,RMB Convertibility,Lujiazui Forum