The Hong Kong Stock Exchange has announced rules to lure new-economy companies to list on the bourse. The move is essential for the city to position itself as China’s largest capital-raising center for such firms.
It is considered the biggest change to the exchange’s listing rules since 1993 when it allowed the listing of large Chinese enterprises.
If Hong Kong could further widen access for investors and companies, the market link between mainland China and Hong Kong would deepen further.
Meanwhile, China’s Central Economic Work Conference is drawing near. In the past, the politburo meeting preceding it often gave signals on what to expect in the conference.
In 2015, for example, the meeting highlighted the need to deepen structural reform and improve the quality and efficiency of the supply-side reform while expanding demand. It also cited the need to reduce the housing stock. These points were then tackled in the Central Economic Work Conference that year.
These measures paid off last year, when the macroeconomy started to bottom out and housing stock in second-tier cities dropped dramatically. Blue-chip stocks outperformed amid improving corporate earnings.
In 2106, the politburo meeting emphasized structural reform and called for a long-term mechanism for the development of a healthy housing market. The Central Economic Work Conference focused on tackling excessive housing inventory in third- and fourth-tier cities.
Destocking in housing markets in lower-tier cities was realized this year.
In the politburo meeting this year, President Xi Jinping said China’s supply-side reform continues to move ahead and structural reform is deepening.
Prevention and mitigation of major risks, effective control of the macro leverage ratio as well as targeted poverty alleviation and environmental protection were also key points. Xi also wants to focus on improving the quality of growth.
These areas are most likely to be addressed in the Central Economic Work Conference to be held this week.
This article appeared in the Hong Kong Economic Journal on Dec 18
Translation by Julie Zhu
[Chinese version 中文版]
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