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  • 2012-06-11

    China Aims to Support IPO Market

China Aims to Support IPO Market
By SHEN HONG
 
SHANGHAI—China's securities regulator said it will take measures to support initial public offerings and refinancing of private companies, part of the government's broader campaign to tap the country's private sector for help at a time of weakening economic growth.
 
The move is the latest in a series of measures unveiled by Beijing in recent weeks to stimulate the world's second-largest economy while at the same time opening up greater space for the country's private sector, which is a key element in the authorities' long-pledged financial reforms.
 
In a statement Friday, the China Securities Regulatory Commission said it will also lower relevant regulatory thresholds in order to support overseas listings of private enterprises.
 
In addition, it will simplify the approval process for private companies to raise funds in the domestic corporate bond market.
 
The CSRC said it will also encourage private capital to invest and take stakes in the country's mostly state-owned securities and futures companies.
 
The securities regulator said it will support private capital in its effort to accelerate industry consolidation and upgrading through mergers and acquisitions.
 
The CSRC said it will also continue to support private capital's investment in domestic asset management companies.
 
Also Friday, China's state assets regulator said it would encourage more private investment in state-owned enterprises to aid their restructuring.
 
The invitation to private capital comes at a time when the profitability of the state sector is flagging. According to figures from the Ministry of Finance, profits earned by central state-owned enterprises fell by 8.6% from a year earlier in the January-April period to 669 billion yuan ($106 billion).
 
Last week, the Ministry of Railways issued a statement saying it will invite private investment in the railway market, which has traditionally been one of the most state-dominated sectors of the Chinese economy.
 
In a bid to attract new capital, the highly-indebted Ministry said it is considering establishing railway-industry investment funds, new initiatives to issue railway bonds, and encouraging initial public offerings of railway companies.
 
And on Wednesday, China's State Council, its cabinet, said it would encourage private investment in industries including energy, telecommunications, education and health care.

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