Draft rules issued to allow foreign companies to list in China from next year

[SHANGHAI] China's justice ministry on Friday published draft rules to allow foreign companies to list on the country's stock exchanges, with the intention of implementing the changes on Jan 1, 2020.

China has long been criticised for barring foreign firms from its capital markets, while Chinese companies debut across the world.

The planned reform has been unveiled ahead of a major import fair in Shanghai next week, that is aimed at showcasing the country's free trade credentials.

The draft rules, published on the ministry's website, would allow foreign companies to compete for government procurement projects on an equal footing and allow them to issue bonds.

They would also prohibit forced technology transfers and introduce punitive measures for such actions.

The US-Sino trade war was in part sparked by US allegations that China engages in forced technology transfers in return for market access.

The Ministry of Justice is seeking public opinion on the draft rules by Dec 1, 2019, with the intention of bringing them into force on Jan 1, 2020.

Foreign firms can enjoy preferential tax treatment, among other benefits if they invest in certain industries, fields and regions, according to the rules.

Government departments should take into account the opinions of foreign firms and chambers of commerce when drafting laws that affect them.

REUTERS