Chinese premier encourages start-up firms to list locally
[SHANGHAI] Chinese premier Li Keqiang said the government would promote domestic listings of start-up firms with "special ownership structure", part of China's efforts to encourage innovation and boost funding for productive sectors of the economy.
At a conference held by China's state council, or cabinet, on Thursday, Li also encouraged the development of the venture capital industry, and urged local governments to give tax incentives to start-up firms, incubators and angel investors who back innovation, according to the central government website.
Many Chinese companies, including technology start-ups and internet giants such as Alibaba, Baidu and Tencent have adopted the so-called variable interest entity (VIE) structure.
Because foreign ownership in China's internet sector is blocked, and Chinese internet startups have difficulty meeting profitability requirements to list onshore, the VIE structure was developed to satisfy the ownership requirements of overseas security regulators without technically breaking Chinese law.
But China plans to relax rules for domestic listings, and is also vigorously developing over-the-counter equity markets to give start-up firms easier access to funding.
REUTERS
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
International
South Korea government offers first compromise to end doctors' strike
Japanese AI tool predicts when recruits will quit jobs
India votes in gigantic election dominated by jobs, Hindu pride and Modi
Britain’s retail sales disappoint in sign of lacklustre recovery
Explosions in Iran, US media reports Israeli strikes
US veto sinks Palestinian UN membership bid in Security Council