China Vows More Easing Cycle Ahead with Softer Offshore Listing, Revive Global Market Interest
China plans to soften its stance on offshore listings and implement moderately easing policies to support its economy. Regulators in mainland China and Hong Kong have urged major investment banks to expedite Chinese companies' listings in Hong Kong, aiming to bolster overseas fundraising and revitalize the world's second-largest economy.
In October, the China Securities Regulatory Commission (CSRC) held meetings with over 10 banks and law firms, including JPMorgan, Morgan Stanley, Goldman Sachs, UBS, CICC, and Huatai Securities, to discuss accelerating offshore listing approvals. Similarly, Hong Kong's bourse operator has initiated discussions with global and Chinese banks to optimize the listing process for Chinese firms.
These closed-door meetings represent a strategic shift for China, which had tightened scrutiny on offshore fundraisings in March 2023, contributing to a slowdown in overseas capital raisings over the past three years. Factors such as regulatory crackdowns, volatile markets, economic slowdown, and geopolitical tensions further squeezed Chinese companies' overseas fundraising efforts.
While the CSRC did not specify a particular venue for speeding up offshore listings, Hong Kong remains the preferred destination, capturing a larger share than New York.
China's softened stance comes as it vows more proactive fiscal stimulus and moderately looser monetary policy to support its sluggish economy. The Politburo, led by President Xi, aims to stabilize property and stock markets while enhancing unconventional counter-cyclical adjustments.
This high-profile meeting sets the stage for the annual Central Economic Work Conference, expected to take place between Dec. 11 and Dec. 12. Top policymakers will review the current year's economic performance and set priorities for the next year, including discussing the growth target and budget for 2025.
While specific targets will not be announced until March, it is widely expected that Beijing will maintain its GDP growth target at around 5% for the next year. President Xi emphasized the need for full preparation to achieve economic targets for 2025, despite uncertainties and challenges, and called for building a favorable external environment.