China it will demand from all its public companies immersed in sectors that are closed to foreign direct investment (such as news and publications on the internet) an explicit authorization from the regulators before they can list their shares outside its continental domain.
The National Development and Reform Commission (CNDR) of the Asian giant published on Monday the new regulations on authorizations and an updated annual Negative List of Foreign Investment, which describes one by one the stock market sectors where foreign direct investment is prohibited or restricted.
These regulations will have to be complied with, from now on, by companies that intend to go public abroad at a time when China tightens scrutiny on sales of shares abroad.
“They must obtain authorization from the relevant Chinese regulatory bodies if they wish to sell shares and list on foreign markets,” the NDRC submitted.
The latest negative list includes prohibited sectors such as compulsory education institutions, news organizations, and rare earth minerals. In addition, foreign investment is restricted in sectors such as publishing, nuclear power plants and telecommunications.
“Foreign investors should not participate in the operation and management of companies and their stakes should be limited to 30%, in line with the rules that regulate companies listed on local stock exchanges,” the document indicates.
“China is studying how to allow companies in sectors prohibited to foreign investment to list abroad under certain conditions, expanding investment channels for foreign investors,” said the Ministry of Commerce of China.
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Kingston is an accomplished author and journalist, known for his in-depth and engaging writing on sports. He currently works as a writer at 247 News Agency, where he has established himself as a respected voice in the sports industry.
