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Xinhua: China Planning a Pilot Program Allowing Foreign Companies to Issue RMB Stock Shares

Xinhua recently reported that the State Council is planning to allow foreign companies to enter China’s stock market by issuing shares of stock in Chinese currency (RMB). The government is designing a pilot program and is preparing rules and technical details. Also under consideration is allowing foreign organizations with Chinese currency to invest those foreign-owned RMB in China’s domestic market. The plan supports Shanghai in becoming an international financial center, while it strengthens Hong Kong’s current status as an international financial center. The plan is part of China’s effort to widen the use of China’s currency internationally and to enhance the acceptance of China’s currency as an international reserve currency. The new pilot program may be extended to issuing bonds and establishing funds, in addition to stock shares.

Source: Xinhua, June 2, 2012