Chinese Companies and the Hong Kong Stock Market
Listing by companies from one country on the stock market of another country is a device often used both to raise capital in, and to increase bonding with, the target country. This book examines the listing by Chinese companies on the Hong Kong stock market. It discusses the extent of the phenomenon, compares the two different regulatory regimes, and explores the motivations for the cross-listing. It argues that a key factor, in addition to raising capital and bonding with the Hong Kong market, is Chinese companies desire to encourage legal and regulatory reforms along Hong Kong lines in mainland China, in order to develop and open up Chinas domestic capital markets.
Flora Xiao Huang is a Lecturer in Commercial Law at the University of Leicester, UK.
Horace Yeung is a Lecturer in Commercial Law at the University of Leicester, UK.
Routledge economic growth and development series
Series Editor: Linda Yueh
Fellow by Special Election in Economics at St Edmund Hall and Director of the China Growth Centre, University of Oxford, UK
The aim of the series is to publish a series of books that applies rigorous economic analysis to the field of economic growth and development. The scope includes regional and country-specific studies, as well as cross-country comparisons, to examine the evidence surrounding the pressing and interesting questions on the growth prospects of developed and developing countries.
1 Chinese Companies and the Hong Kong Stock Market
Flora Xiao Huang and Horace Yeung
Chinese Companies and the Hong Kong Stock Market
Flora Xiao Huang and Horace Yeung
First published 2014
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN
and by Routledge
711 Third Avenue, New York, NY 10017
Routledge is an imprint of the Taylor & Francis Group, an informa business
2014 Flora Xiao Huang and Horace Yeung
The right of Flora Xiao Huang and Horace Yeung to be identified as authors of this work has been asserted by them in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988.
All rights reserved. No part of this book may be reprinted or reproduced or utilized in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers.
Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe.
British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging in Publication Data
Huang, Flora Xiao.
Chinese companies and the Hong Kong stock market/Flora Xiao Huang and Horace Yeung.
pages cm. (Routledge economic growth and development series)
Includes bibliographical references and index.
1. Stock exchangesChinaHong Kong. 2. Hong Kong Stock Exchange.
3. Business enterprisesChina. I. Yeung, Wai Ho, 1982 II. Title.
HG5790.15.H65H83 2013
332.6425125dc23
2013015927
ISBN: 978-0-415-64277-4 (hbk)
ISBN: 978-1-315-88369-4 (ebk)
Typeset in Times New Roman
by Wearset Ltd, Boldon, Tyne and Wear
Figures
A summary of motivations for cross-listing
The evolution of Chinas issuance system
Ranking of Asian financial centers
Tables
Chinas share categories
Timeline of the CSRCs enforcement
Ranking score of selected top international banking centers
China and Hong Kong securities enforcement (200108)
Market capitalization of H-shares (Main board and GEM) 19932011
Yearly total funds raised through IPOs, domestically and in Hong Kong, 19932009 (US$ billion)
Strategic investors in key Chinese banks (as of August 2009)
Accounting and auditing standard differences in different market segments
A jailbird list in Chinese listed companies in Hong Kong
Transactions between Kelon Electronics and Guangdong Kelon (Rongsheng) Group (19972001)
Key financial indicators of Sinopec
Sinopecs ranking in the Fortune Global 500
Selected features of the three laws
The number of A-share IPOs (200211)
Shareholding of the largest shareholders of 916 sample listed companies before and after the reform
Shanghais position among the world financial markets
The worlds top financial centers (previous ranking and score in brackets)
This book is essentially based on research carried out by Flora Huang during her days at SOAS, University of London, with additional contributions from Horace Yeung. China is an important case in the landscape of cross-listing, not only because of a number of overseas flotations, mainly in Hong Kong, but because of the relationship between the two jurisdictions under the One Country Two Systems ideology and a high degree of socio-political proximity. This study is capable of covering the perspectives of both jurisdictions by combining the expertise of Flora, who has spent most of her life thus far in China, and Horace, who was born and educated in Hong Kong.
Flora is indebted to Sanzhu Zhu, Nick Foster, and Peter Muchlinski, whose encouragement, guidance, and support throughout her years at SOAS enabled her to develop a conceptual plan into a real project. Without their tremendous help this project would have never been completed. She would also like to give her special thanks to Mathias Siems, Linda Yueh, Michael Palmer, and Lynn Welchman, who gave their valuable advice on the research direction. Furthermore, she is thankful to Chao Xi at the Chinese University of Hong Kong and Judge Baojian Geng at the Supreme Peoples Court of China for their inspirations during her fieldwork in Hong Kong and China. Lastly, she wishes to express her gratitude to Paul Jones, Gil Lan, Timur Gok, Beverley Yeung, Peer Zumbansen, Yue Xu, and Shujie Yao for their constructive comments on certain parts of the book.
Horace is indebted to Jennifer Payne for her guidance and patience throughout his years at Oxford. Special thanks are due to Dan Prentice, John Armour, and Philip Lawton for their detailed and helpful comments on certain parts of the book.
Floras research was funded by the Central Research Fund of the University of London, Scholarship of Universities China Committee in London, SOAS Postgraduate Additional Fieldwork Award, SOAS Conference Grant, and AHRC Skills Fund. Horaces research visits to Hong Kong were funded by Mansfield College and the Faculty of Law of the University of Oxford and the University of Exeter. The authors are grateful for the generous support of these bodies, which has made this project possible. We are also grateful for the excellent research facilities provided by SOAS, the Chinese University of Hong Kong, Hong Kong Monetary Authority, as well as the Universities of Hull, Exeter, Oxford, and Leicester.
Last, but not least, the authors are thankful for the help of the editors of the Routledge series on Economic Growth and Development.
