Exchange Books Passage on a Fast Boat to China
Lyons, Tony, The Independent (London, England)
Investors could soon be able to buy and sell Chinese shares that are quoted on the London Stock Exchange. A quick phone call to a stockbroker and they can trade in companies quoted on the London market which are based in one of the fastest-growing economies in the world.
This will follow the hoped-for signing later this year of a Memorandum of Understanding by the London Stock Exchange, the Treasury, the Securities and Investments Board and the China Securities Regulatory Commission.
A seminar held in Peking at the end of last month was initiated by the London Stock Exchange and co-sponsored by the China International Trust and Investment Corporation. The latter is the Chinese authority for arranging funds for investment in China and arranges joint ventures internally and overseas.
It was opened by Li Lanqing, China's Vice-Premier, and Michael Heseltine, the Deputy Prime Minister, who was coincidentally leading a trade delegation to China at the same time. Over 300 of the most senior members of the Chinese business community attended.
China has an insatiable appetite for foreign investment. Since the start of the "socialist market economy" in the 1980s which replaced the centralised control of the Communist regime, over 300,000 industrial enterprises have been formed. Its economy is expanding rapidly, by over 12 per cent a year. China is already the third-largest economy in the world, and expected to be the largest by 2020.
"Few economies have more potential than the Chinese economy," Ian Slater, deputy chairman of the Stock Exchange, told the delegates in Peking. "The London Stock Exchange wants to ensure Chinese companies are aware of the tremendous strengths of London's financial markets and the role London can play in enabling them to raise capital.
Mr Slater says that more than 500 international companies have chosen to list in London - significantly more than on any other exchange. "It is also the world's largest market for the trading of international equities."
The Chinese, who have already signed similar memorandums with the United States, Hong Kong and Australia, want to adopt a cautious entry to the London market. They want a full knowledge of how our markets operate, who will own the shares in the companies and how our stock markets are regulated.
Do not expect a rush of Chinese companies that want to have their shares traded in London. At most, only one or two are expected in the next 18 months. The Chinese will want to see how we differ from other countries with …
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Publication information: Article title: Exchange Books Passage on a Fast Boat to China. Contributors: Lyons, Tony - Author. Newspaper title: The Independent (London, England). Publication date: June 8, 1996. Page number: 26. © 2009 The Independent - London. Provided by ProQuest LLC. All Rights Reserved.
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