(Yicai Global) June 19 -- Chinese listed firms still boast high-quality resources overall, though some China concept stocks do have issues, said Zhou Xiaochuan, ex-governor of the People's Bank of China -- the country's central bank -- and head of the China Society for Finance and Banking, at the Lujiazui Forum held yesterday.
The Holding Foreign Companies Accountable Act the US Senate passed a month ago imposes a greater information disclosure burden on overseas firms that list in the US, adding the market frets that Chinese companies listed in the US will face higher risks of delisting.
Asking public companies to delist as the bill seems to do will harm the benefits and interests of international investors, especially those in the US and some institutional investors, Zhou warned, and finding ways to embody the measures to protect the interests of those from both the US and other nations will be a test for the US, especially for its Securities and Exchange Commission.
Zhou said firms should be optimistic, adding China has much space for financing and a high savings rate, with overall deposits in the previous years making up over 40 percent of gross domestic product, which means finding investments to inject into emerging and mature firms is quite easy.
China's GDP growth has outperformed the global average and many companies can be deemed 'good' from the supply-side angle, he stated.
The Luckin Coffee case, as well as the previous investigations and short-selling targeting several China's concept stocks, all exposed the gap between China and global standards for accounting, auditing and transparency, Zhou also said.
China has implemented most of its opening measures via pilots first, followed by gradual and wider opening, with the desire to build the country into an open socialist market economy. Yet these measures are still not enough, and greater resolve is still needed, Zhou explained, adding Shanghai's financial market is growing quite well, but has potential for even further internationalization.
China concept stocks are those of companies listed overseas whose assets or earnings have significant activities in the Chinese mainland. Many top mainland firms have opted for overseas listings to access foreign capital. They are featured on several major global stock exchanges in London, Hong Kong, Tokyo, Singapore, New York and on the Nasdaq, NYSE MKT and Euronext.
Editors: Chen Juan, Ben Armour