China mulls new exchange for overseas-listed firms
China is in early talks to establish a new stock exchange for overseas-listed firms as it looks to lure tech heavyweights.
China has two main onshore exchanges in Shanghai and Shenzhen which have the same rules governing IPOs and non-initial listings.
This is in contrast to other leading bourses including Hong Kong’s which offers waivers for secondary listings.
China’s State Council has asked the securities regulator to look at a new exchange that would target Chinese firms listed in offshore markets, according to Reuters. One option being discussed is upgrading an existing platform such as a smaller bourse in Beijing.
The government is reportedly hopeful a new bourse would lure tech giants like Apple and Tesla, which could then carve out local businesses and listing on the new exchange.
It is very rare for overseas companies to raise funds in China largely because of the government’s strict control over the exchanges. Attempts to open up markets via stock connect projects, like the London-Shanghai Stock Connect, have struggled to get off the ground because of a tense geopolitical backdrop.
The US and China remain locked in conflict which has seen the American regulator move to expel Chinese companies from US exchanges if they do not comply with standards.
Firms like Alibaba, Baidu and JD.com have all conducted secondary listings in Hong Kong worth a combined $36bn, according to Refinitiv data.