China intends to roll back curbs on private share placements

China intends to roll back curbs on private share placements

China is on the verge of rolling back curbs on private share placements by businesses with the aim of improving their access to funding within the initiative to reduce strains on the country’s businesses and the domestic economy.

In fact, the curbs were put in place by watchdogs two years ago in the face of worries about abuse by businesses and traders as well as a lack of transparency on such share sales that were below the stock's last openly traded value.

Additionally, the China Securities and Regulatory Commission is working on amendments to the regulations, including limits on the sale of stocks purchased via private placements as well as the mechanism for pricing stocks in private offerings.

In China, private placements rallied five-fold to $172 billion, dodging watchdogs’ controls on initial public offerings and also boosting worries that businesses were raising too much funds for speculative or inefficient purposes.

It backed fresh rules from the CSRC in 2017 restricting the size of such fundraisings to just 20% of a firm’s capitalization, which requires an 18-month gap in between private offerings, and without some sectors altogether.

Nevertheless, the clampdown on private placements meant a great number of businesses had to turn to ramping up debt instead, contributing to the sizeable corporate debt burden in the world’s number two economy.

A long-lasting regulatory clampdown on riskier types of financing as well as debt restricted many businesses’ access to financing in 2018, resulting in the biggest-ever year for onshore defaults and also a steep tail-off in investment, which put pressure on the economy.

More businesses than ever are missing payments in 2019, highlighting an ongoing  cash crunch as the Chinese cabinet intends to give up broad policy easing.


Markets Assess US-China meeting
Markets Assess US-China meeting

Hong Kong’s HK 50 index rose and the Chinese yuan edged up as traders assess the outcome of the first virtual meeting between US President Joe Biden and Chinese leader Xi Jinping.

Latest news

Can the UK CPI surprise?
Can the UK CPI surprise?

The UK Office for National Statistics will publish Consumer Price Index (CPI) data on Wednesday, May 18, at 09:00 MT.

The US Retail Sales Update
The US Retail Sales Update

The US Census Bureau will announce Core Retail Sales and Retail Sales on Tuesday, May 17 at 15:30 MT.

Deposit with your local payment systems

Be on top of your game

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.


A manager will call you shortly.

Change number

Your request is accepted.

A manager will call you shortly.

Next callback request for this phone number
will be available in

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later

Don’t waste your time – keep track of how NFP affects the US dollar and profit!

Beginner Forex book

Beginner Forex book will guide you through the world of trading.

Beginner Forex book

The most important things to start trading
Enter your e-mail, and we will send you a free Beginner Forex book

Thank you!

We've emailed a special link to your e-mail.
Click the link to confirm your address and get Beginner Forex book for free.

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera