Foreign Investments in Chinese capital markets - Foundation Office China
Event Reports
The Chinese market is currently in a stage of transition. The fast growing economy, the steady development of conventional industries and the rise of new industries constantly attract foreign investors. Due to foreign exchange control, foreign investments used to be heavily restricted in China. In recent years however the continuous expansion of China’s economy has been accompanied by the gradual opening up of the Chinese capital markets to foreign investors.
The first panel of the conference dealt with enforcement concepts by supervisory authorities and the experiences made in Germany and China. In Germany the Federal Financial Supervisory Authority integrates supervision and regulation of the Banking Sector, the Insurance Sector and the Securities Sector in order to contribute to financial market stability, whereas in China the regulatory framework is undergoing a process of adapting to the rapid development of the Chinese market.
The developments of the Chinese capital markets and the relevance of foreign investments were illustrated in the second session. In recent decades the Chinese stock and capital market has gradually opened up, increasing the amount of foreign investors as well as the number of Chinese off shore investments.
After the previous introduction of public enforcement concepts, the third panel of the conference outlined private enforcement and other procedural possibilities. This session mainly focused on a comparison of the Chinese and German model whilst nevertheless referring to the system of other nations.
The fourth panel of the conference was tackling the issue of supervisory boards in Chinese and German stock corporations. While the German framework is giving higher competences to the supervisory board compared to the board of directors, the Chinese law would perceive them as equal. This leads to many issues in terms of conflicts and interest competition. The example of the Japanese corporate law reform showed that legal frameworks could also tolerate different patterns or hybrid models of company law, in order to attract more investments.
The conference on foreign investments on Chinese capital markets has successfully given an overview over the complex topic and portrayed ongoing and future developments. Especially the comparative perspective view, given by leading Chinese and German experts, gave deep insights into the topic and fostered mutual understanding. Concluding, it may be said that the Chinese capital market has come a long way, yet still is in the process of continuous development.
