Bloomberg News

Chinese Regulator to Help Private Companies to Raise Capital

May 25, 2012

Construction at an upscale residential site in central Beijing. Photographer: Stephen Shaver/UPI/Landov  

Construction at an upscale residential site in central Beijing. Photographer: Stephen Shaver/UPI/Landov  

The China Securities Regulatory Commission will modify rules to help privately owned companies to raise capital, part of government efforts to aid smaller businesses struggling for funds.

The regulator will support sales of bonds and public shares by private companies, and encourage them to list overseas, the CSRC said in a statement on its website yesterday. The government will also speed up the establishment of an over-the- counter market and encourage private investment in securities and futures brokerages, it said.

China’s efforts last year to cool inflation and rein in home prices with lending curbs and higher interest rates reduced the availability of financing for smaller businesses, prompting bankruptcies and suicides in the city of Wenzhou. The government said this week it will let small and medium-sized companies sell bonds through private placements starting in June.

The nation is encouraging companies to raise more money through stock and bond sales to reduce their dependency on bank loans and increase the transparency of their finances.

CSRC Chairman Guo Shuqing has been an advocate of expanding China’s corporate debt market, saying in a March interview with the official People’s Daily that the country’s equity and bond markets “seriously” lag behind the demands of the real economy.

To contact Bloomberg News staff for this story: Helen Yuan in Shanghai at hyuan@bloomberg.net

To contact the editor responsible for this story: Rebecca Keenan at rkeenan5@bloomberg.net


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