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Jun 04, 2019

Trade tensions provide opportunities for Chinese listed companies, says CSRC head

Trade issues will help companies strengthen innovation and improve independent research

The ongoing trade debacle between China and the US presents opportunities to Chinese listed companies, according to Yi Huiman, head of the China Securities Regulatory Commission (CSRC).

The trade tensions will force listed companies to ‘strengthen innovation, improve independent research and development capabilities, raise product competitiveness and achieve sustainable development,’ Yi says in a statement reviewing the position of the Chinese capital markets.

According to Yi, listed companies in China operated solidly in 2018, with overall operating revenue up 11.48 percent year on year to ¥45.45 tn ($6.9 tn), though their profits fell slightly by 1.82 percent.

Yi also emphasizes the importance of improving the quality of listed companies, saying that the CSRC will play its part, adhering to market principles, rule of law and internationalization, and deepen supply-side structural reform of the capital market.

He says the CSRC will ‘focus on the quality of information disclosure, improve corporate governance and strengthen the supervision of major shareholders and senior executives’ as well as ‘optimize regulatory arrangements for M&A and expand exit channels through restructuring, bankrupting and delisting.’

Furthermore, the opening up of China’s capital markets and financial sectors will not be changed by the China-US trade dispute, as ‘it is necessary for China’s financial sectors to improve their services and global competitiveness,’ Yi says. ‘China will stick to the timetable and plan unveiled in 2018 for the opening up of financial sectors.’

In addition, he says the scrapping of shareholding limits for foreign investors in securities and futures will be carried out before 2021. He also highlights that the CSRC is working on a plan that seeks to improve the quality of listed companies over the next three to five years.

Yi, who took up his current role in January – replacing Liu Shiyu, who is currently under investigation for suspected law violations – was previously chairman of the Industrial and Commercial Bank of China. His job has focused on helping the CSRC regain public trust following a series of violations in which companies paid officials to gain regulatory approval.