China's Private Firms Rush to Raise Funds Abroad

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Last updated at: (Beijing Time) Monday, October 07, 2002

China's Private Firms Rush to Raise Funds Abroad

While the Chinese mainland's second board stock market is still hanging, more and more fund-thirsty private firms are heading overseas to raise capital.

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While the Chinese mainland's second board stock market is still hanging, more and more fund-thirsty private firms are heading overseas to raise capital.

Compared to bourses like the NASDAQ and in Singapore, the Hong Kong Special Administrative Region, an international financial center that links the Chinese mainland to businesses around the world, is a more favorable choice, according to Monday's China Daily.

The past few months, the English-language newspaper said, have witnessed batches of Chinese business delegations flooding to HongKong to promote themselves to international investors.

One such business group led by Zhan Xiliang, secretary-general of the Economic System Reform Office of East China's Shandong Province, went to Hong Kong to study its capital market in August.

Presently, Shandong has about 70 companies listed on the Shanghai and Shenzhen stock exchanges, but nearly all of them are state-owned.

"Many private companies have been blocked out of the main boardbecause of the high threshold," Zhan was quoted by the paper as saying. "And the second board has been delayed. So they have to find more financial resources."

Richard Peng, head of China & International Development at the Hong Kong Exchanges and Clearings Ltd, has been very active in promoting the Hong Kong stock market to mainland enterprises in recent years, according to the paper.

When the reshuffling of the high-tech industry affected the performance of tech-dominated stock markets globally, increasing financial demand from the Chinese mainland's growing enterprises brought new business opportunities for Hong Kong.

Currently, more than 50 private firms from the Chinese mainlandare lining up for listing in Hong Kong, and another 50 are expected to list in the region every year for the next few years.

Private businesses have flourished in China after more than twodecades of economic reform, with the number of private small and medium-sized enterprises growing 15 times during the 1990s.

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