Foreign Companies now Allowed to Sell Stocks to Raise Funds for Capital
China will now allow foreign trade companies that are registered in the free trade zone in Shanghai to sell shares in efforts to raise funds for capital in a designated trading platform. The shanghai equity exchange which is partially owned by the Shanghai Stock Exchange is also planning to develop a similar platform.
To offer trading of foreign equities will allow shanghai to become a global financial center and will widen options of the nation’s individual investors that currently are being restricted in buying shares from foreign companies whether based in the free trade zone or abroad by the capital controls of China.
HSBC Holdings along with the Bank of East Asia have already been given the approval to create a sub branch in the free trade zone as these companies have already expressed their intentions to sell stocks and to further create a open and more efficient system of economy.
Just last month the free trade zone in shanghai was opened as a proving ground for companies to trade openly with little restrictions and is the new market policies is hoped to broaden the investment relations of the second largest economy in the world.