| According to some market statistcs, these years have witnessed steady growth in number and capital amount for China’s domestic enterprises to prefer to launch IPO overseas. The reason is that the globalization of the capital market and economy demands China to open its domestic market which enables China’s enterprises to stage on the international arena to compete and grow with those excellent enterprises from other countries. However in China, the immature capital market and imperfect legal environment slows down the pace of internationalization in order to protect domestic capital market which is just at the beginning of its development.Owing to the institutional deficiency, ways of domestic financing are quite limited, which results in cash flow problems and project financing inconvenience for private enterprises, who find it almost impossible to gain favor from domestic capital market and get effective support from it. Therefore, it leaves no choice for private enterprises other than breaking the "dual system" of the capital market and financing in foreign capital market. The main method of doing this is to establish a special company in offshore financial center with the purpose of, after receiving capital turned over from domestic, serving as the listed company so as to seak financing from foreign capital market. And this is called "Red Chip Listing". Because of the growing impact of private companies’red chip listing exceed on China’s economy, capital market development and equal competition among enterprises, the government comes to put it under supervision the same way as to the state-owned enteiprises, which sets hindrance to the formerly unobstructed endeavor of private enterprises to seek red chip listing.In spite of the fact that red chip listing brings lots of benefits to private enterprises, it is deemed dangerous from the perspective of macro regulation and control of the country, because some people regard it as fake foreign capital by turning enterprise assests over to the special purpose company overseas and investing back to China. It is an abuse of preferential policies for foreign investors, causing unequal footing for other domestic enterprises, loss of national revenue, lack of government supervision, and even impairing the quality of our country’s balance of payments. Therefore, Chinese government has never ceased to supervise the red chip listing.It has been over twenty years since the first red chip listing of private enterprise, yet the governmental supervision in this area is just at the beginning stage of development and needs improvements in many regards. From the fact that series regulations and policies have been launched during a single year by the government in red chip listing, no matter the once sensational "No Objection Letter" or today’s " Aticle Ten", it is evident that our government is wading across the stream by feeling the way in the field of red chip listing supervision, just as it does in seaching the socialist road with Chinese characteristics.The paper is consisted of the following five parts:firstly, the author would explain the concept of red chips listing both theoretically and practically, make a comparison with other relevant legal concepts, and analyze the necessity of red chips listing. Secondy, consciencious analysis would be carried out regarding detailed steps of red chips listing. At the same time, the authour would also introduce two models of curve red chips listing in practical operation under comprehensive regulation of the government. The third part is the major one of this paper. In this part, the author emphasizes on analyzing the historical evolution, content and department and the problems exist during the red chip listing supervision.The forth part is also the major one of this paper. In this part,the auhor proposes several suggestions for solving the existing problems. Last but not least, a brief summary of the paper would be made. |
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