October 12, 2008

China favors local IPOs for foreign firms

According to Chinese Ministry of Commerce, China will steer foreign firms to go public on domestic stock markets as part of a drive to spur foreign investment. China has repeatedly stated its intention to let overseas companies list locally, but the Shanghai and Shenzhen stock exchanges still boast no foreign firms.

The ministry said on its website, without elaborating that "We will guide qualified foreign invested companies to make local listings.”

It also restated its position that it would encourage foreign firms to take over or buy into state owned enterprises. But it said factories that pollute were not welcome and foreign investments in steel, cement, aluminum and property would be subject to close scrutiny.

The ministry said China would face new challenges in attracting foreign investors in 2008, but FDI inflows would remain large.