BEIJING - Chinese authorities are accelerating the process to allow overseas companies to float shares in the domestic A-share market as a way to ease the country's mounting pressure of "hot money" inflows.

"The international board will be launched some time next year, hopefully," Fang Haixing, director general of Shanghai's financial services office, said on Wednesday at a financial forum in Shanghai.

Fang said that the approval procedures for overseas companies seeking listing on the board will be made simpler and faster than for domestic companies.

"We will not let companies feel that they have to endure unacceptable procedures," he said.

Fang's comments come after the central bank in Beijing called for a speedier launch of the international board, which could be used as a pool for hot-money hedging.

Ma Delun, deputy governor of the People's Bank of China, said that the central bank hopes the international board will be launched as soon as possible, adding that market and industry demand for the board is real.

Zhou Xiaochuan, the central bank's governor, recently put forward the idea of constructing a "pool" to accommodate inflowing speculative capital, or "hot money", a move interpreted as a prelude to an array of policies to contain rising inflation and asset bubbles.

The securities regulator said earlier this year that overseas companies could list on the new board through initial public offerings (IPO) or depositary receipts traded on Chinese stock exchanges. It is also exploring the possibility of overseas companies issuing yuan-denominated bonds and other debt instruments.

The launch of the international board is being widely watched because it could draw a string of multinational companies to the mainland fundraising pool.

The new board is considered a key step in making Shanghai an international financial center as well as broadening investment channels for China's growing yuan savings.

China Daily

(China Daily 12/02/2010 page13)