The factors limiting the overseas listing of Chinese privately-owned enterprises: The Ningbo case
With the transformation of the Chinese economy from a planned economy to a market one, the capital market has seen a great development. It plays an increasingly important role in realizing the conversion of social capital to long-term investment and to optimize resource allocation. From 1990, when the Shanghai Stock Exchange and the Shenzhen Stock Exchange were established, to the end of 2007, a total 1550 companies had been listed in these two domestic capital markets, which attracted 138.87 million investors to hold stocks and securities, reported by China Security Regulatory Commission. According to statistics published by the Shanghai Stock Exchange and Shenzhen Stock Exchange, a total of 843.186 billion RMB was raised in 2007. Meanwhile, Chinese enterprises begin to be listed in overseas capital markets to meet the increasing demands of international capital. On September 10, 1992, Huachen China was listed in NYSC and became the ﬁrst company listed in the overseas capital market. By the end of 2006, a total of 401 Chinese enterprises were successfully listed in the three main overseas capital markets, Hong Kong, Singapore and the United States; and their total market value was US$954.838 billion. In 2005 and 2006, the numbers of listed enterprises and the size of funds raised in overseas markets were more than those in the domestic markets. But Chinese enterprises, especially small and medium privately-owned ones, come up against many diﬃculties when they are seeking an overseas listing. Based on the analysis of listed enterprises in Ningbo, this chapter tries to ﬁgure out the main factors limiting the overseas listing and to propose possible solutions to overcome these diﬃculties.