Ping Han 5 June 2008, London

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Ping HanPing Han5 June 2008, London5 June 2008, London

Overview of China’s Overview of China’s Overseas ListingOverseas Listing

and Related Policy and Related Policy

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I Market Overview I Market Overview

II Overseas ListingII Overseas Listing

III Reform and III Reform and Policy

Outline

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Section ISection IMarket Overview Market Overview

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Markets OverviewMarkets Overview

A share Companies: 1,576 B Share Companies: 109 H Share Companies: 150 Capitalization in Domestic Market: RMB

24.02 trillion, which accounted for 96% GDP (among which the capitalization for tradable stocks amounted to RMB 7.95 trillion)

(End of April 2008)

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Markets OverviewMarkets OverviewInstitutional Investors: Securities Institutional Investors: Securities

Investment Funds, Quantified Foreign Investment Funds, Quantified Foreign Institutional Investors (QFII), Insurance Institutional Investors (QFII), Insurance Companies, Corporate Annuity FundsCompanies, Corporate Annuity Funds

Fund management companies: 60 Fund management companies: 60 Total funds number: Total funds number: 359 359 Open-ended funds: Open-ended funds: 318 318 Close-ended funds: Close-ended funds: 41 41

(End of April 2008)

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Two stock exchanges (the Shanghai Stock Exchange and the Shenzhen Stock Exchange)

Three commodity futures exchanges (Dalian Commodity Exchange, Shanghai Future Exchange, Zhengzhou Commodity Exchange)

One Financial Futures Exchange (China Financial Futures Exchange)

A multi-tier securities market comprised of a main board, SME board ,GEM (to be built) and agency share transfer system for non-listed shares.


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Products: Stocks (namely, A-shares, B-shares and H-shares, etc.) Bonds (T-bonds, corporate bonds, enterprise bonds

and convertible bonds) Securities Investment Funds Warrants Commodity Futures( cooper, aluminum, natural

rubber, fuel oil, zinc, gold, wheat, cotton, white sugar, PTA, rapeseed oil, soybean, soybean meal, corn, soybean oil, LLDPE and RBD palm oil)


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106 Securities Companies with total assets and net capital amounting to RMB 1.73 trillion and RMB 296.8 trillion

177 Futures Companies with total assets and net capital amounting to RMB 50 billion and RMB 9.5 billion.

Securities Service Firms


(End of April 2008)

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1992: B shares Launched1992: B shares Launched1993: Domestic enterprises listed in Hong 1993: Domestic enterprises listed in Hong

Kong and other overseas markets Kong and other overseas markets 1995: First joint venture investment bank 1995: First joint venture investment bank

mid-1990s: Sino-foreign joint ventures listed in mid-1990s: Sino-foreign joint ventures listed in

domestic markets domestic markets 2002: QFII scheme started2002: QFII scheme started20072007 ：： QDII scheme startedQDII scheme started

Markets Overview- Markets Overview- Opening-upOpening-up

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Markets Overview-Markets Overview-WTO WTO CommitmentsCommitments

Foreign entities permitted to establish joint Foreign entities permitted to establish joint ventures with local parties up to 33% to conduct ventures with local parties up to 33% to conduct domestic securities investment fund management domestic securities investment fund management business. By 2005, foreign investment could be business. By 2005, foreign investment could be increased to 49%increased to 49%

By 2005, foreign securities institutions will be By 2005, foreign securities institutions will be permitted to establish joint ventures, not exceeding permitted to establish joint ventures, not exceeding 33%, to engage (without Chinese intermediary ) 33%, to engage (without Chinese intermediary ) in underwriting A shares and in underwriting and in underwriting A shares and in underwriting and trading of B and H shares as well as government trading of B and H shares as well as government and corporate debtsand corporate debts

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Markets Overview-Markets Overview- Fulfillments of WTO CommitmentFulfillments of WTO Commitment

JV securities companies:7 companies:7 JV fund management companies: 31 (UK companies

become the shareholder of 4 JV fund management companies)

54 Overseas Financial Institutions were licensed as QFIIs (With a Total Investment Quota of US$10.495 Billion);11 UK Financial Institutions were licensed as QFIIs (a Total Investment Quota of US$3.095 Billion)

12 Banks(5 Foreign Banks branch） were Licensed as Custodians

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Qualified Domestic Institutional Investor Qualified Domestic Institutional Investor （（ QDIQDIII ）） , approved by the CSRC, may raise fund at ho, approved by the CSRC, may raise fund at home and invest the product in the foreign stock marme and invest the product in the foreign stock markets. kets.

21 21 fund management companies and 9 securities fund management companies and 9 securities companies were companies were licensed as QDIIs.

9 QDII products (a Total investment quota of US$9 QDII products (a Total investment quota of US$32.5 Billion)32.5 Billion) were ere invested to the overseas markets.

(End of April 2008)

Markets Overview- QDIIMarkets Overview- QDII

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Markets Overview-Markets Overview-International CooperationInternational Cooperation

CSRC had signed 39 Memoranda of Understanding (MOU) regarding cooperation with the securities and futures regulators of 35 jurisdictions.

AS an ordinary member of IOSCO and its Executives Committee member, CSRC formally signed the IOSCO Memoranda of Understanding Concerning Consultation and Cooperation and the Exchange of Information in April 2007.

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Section IISection IIOverseas Listing Overseas Listing

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Chinese enterprises began to go public at overseas markets in June 1993

Tsingtao Brewery was the first Chinese company to issue H-share

The successful overseas listing encourages more and more Chinese enterprises to the Hong Kong market and gradually to the US, Singapore and London markets.

Overseas ListingOverseas Listing

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Overseas ListingOverseas ListingConvergence of the new Corporate Accounting

Standards (CAS) and International Financial Report Standards (IFRS) :

The China Accounting Standards Committee (CASC) had signed the joint statements with the International Accounting Standards Board (IASB) and the Hong Kong Society of Accountants on the substantial convergence of CAS and IFRS.

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150 Chinese companies issued H shares overseas , raising 110.48 billion US dollars in total.

147 of them were listed on the Hong Kong Exchanges (of which 13 were dually-listed in Hong Kong ,New York and London; 3 solely listed in Singapore); and 55 companies out of 150 H share companies issued A shares as well.

(End of April 2008)

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Types of H-share Compani es

11%

5%

15%

36%

15%

3%

6%9%

Petrol eum, Chemi calproducts and Mi ni ngEl ectri ci ty, Gas, Water Suppl y

Transport andi nterral atedi ndustri esManufacturi ng

I T

Real Estate

Fi nance

Others

(End of April 2008)

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Number of H- share Compani es, 2000- Apr i l , 2008

-

5

10

15

20

25

2000 2001 2002 2003 2004 2005 2006 2007 2008*

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Structure of Rai sed Fundsby Types of H-share Companes

19%

2%

15%

9%5%1%

47%

2%

Petrol eum, Chemi calproducts and Mi ni ng

El ectri ci ty, Gas, Water Suppl y

Transport andi nterral atedi ndustri esManufacturi ng

I T

Real Estate

Fi nance

Others(End of April 2008)

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Overseas ListingOverseas ListingI ncome Structure by Types of

H-share Compani es i n 2007

47%

26%

2%

5%

11%

2%

5%1%

1%

Mi ni ng

Fi nance

El ectri ci ty, Gas, WaterSuppl yTransport

Manufacturi ng

Petrol eum, Chemi ncalProductI T

Real Estate

Other

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Profi t Structure by Types of H-share Compani es i n 2007

37%

46%

2%

3%7%

0% 1%0%4%

Mi ni ng

Fi nance

El ectri ci ty, Gas, Water Suppl yTransport

Manufacturi ng

Petrol eum, Chemi ncalProductI T

Real Estate

Other

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Provide more financial options and better Provide more financial options and better corporate governance for Chinese enterprisescorporate governance for Chinese enterprises

Accelerate the restructuring of large SOEs Accelerate the restructuring of large SOEs and enhanced their reputation and and enhanced their reputation and competitiveness.competitiveness.

Gain exposure to international practices Gain exposure to international practices International investors began to learn about International investors began to learn about

Chinese economy and build up confidence in Chinese economy and build up confidence in investing in Chinainvesting in China


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Section IIISection IIIReform and PolicyReform and Policy

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Reform and PolicyReform and Policy

Successful non-tradable share reformSuccessful non-tradable share reform Actively promoting multi-tier marketsActively promoting multi-tier markets Improving corporate governance of listed companiesImproving corporate governance of listed companies Comprehensive restructuring of securities companiesComprehensive restructuring of securities companies Expanding the institutional investors baseExpanding the institutional investors base Stable development of the future marketStable development of the future market Gradual refinement of securities legal frameworkGradual refinement of securities legal framework Strengthening enforcement and cracking down on Strengthening enforcement and cracking down on

illegal activitiesillegal activities

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In future, we will:In future, we will: Further strengthen the construction of legal system Further strengthen the construction of legal system

and capital markets integrity, and improve markets and capital markets integrity, and improve markets supervisionsupervision

Further improve markets infrastructure and increase Further improve markets infrastructure and increase investment instrumentsinvestment instruments

Further improve quality and corporate governance of Further improve quality and corporate governance of listed companieslisted companies

Further strengthen coordination and cooperation, Further strengthen coordination and cooperation, among the various regulators , prevent and reduce among the various regulators , prevent and reduce markets risksmarkets risks

Reform and Policy Reform and Policy

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Reform and Policy Reform and Policy

Gradual Opening-up of our marketsGradual Opening-up of our markets Continually support qualified Chinese companies Continually support qualified Chinese companies

to offer and be listed in overseas marketsto offer and be listed in overseas markets Promote more A-share companies to issue H-Promote more A-share companies to issue H-

shares on overseas stock exchangesshares on overseas stock exchanges Revise the rules and regulations of overseas listing Revise the rules and regulations of overseas listing

to further improve the transparency of legal to further improve the transparency of legal environment. environment.

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ConclusionConclusion

China’s Overseas listing:China’s Overseas listing: Steady and Long Term Policy Steady and Long Term Policy

Part of our Opening-up StrategyPart of our Opening-up Strategy

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WWW.CSRC.GOV.CN

Thank You

Ping Han 5 June 2008, London

Economy & Finance