Chinese regulators met with global investors on Friday, according to people familiar with the matter, stepping up the government’s bid to boost market confidence as the country’s economic recovery loses steam.
China Securities Regulatory Commission Vice Chairman Fang Xinghai (方星海) met with some global venture capital and private equity firms to hear their concerns about investment in the country, the sources said.
Among those present were Neil Shen (沈南鵬), founding partner of HongShan (紅杉) — formerly known as Sequoia Capital China (紅杉資本中國) — and representatives from GIC Pte and Warburg Pincus. Temasek Holdings Ltd’s China head Wu Yibing (吳亦兵) also joined.
Photo: Reuters
The rare meeting came after Chinese President Xi Jinping’s (習近平) administration voiced its strongest support in recent years for the country’s private tech enterprises just days earlier.
The government’s efforts, however, have been met with skepticism, as investors call for more concrete measures and stronger stimulus to revive growth.
Topics discussed at Friday’s meeting included steps that can be taken to ensure global funds can continue to invest in China, the people said. Regulators were urged to expedite procedures for overseas initial public offering registrations, accelerate listings in mainland China and relax merger-and-acquisition rules, one of the people said.
Escalating tensions between China and the US, Beijing’s multi-year crackdown on its private sector and the country’s weakening economy are dampening investor interest.
Last week, a US congressional committee said it was investigating four venture capital firms for their investment in Chinese technology companies, the latest sign of Washington’s increasing scrutiny of US funds suspected of helping develop sensitive industries in China. The entities under investigation are GGV Capital, GSR Ventures, Walden International and Qualcomm Ventures.
The US Department of State also recommended last month that Americans reconsider traveling to mainland China because of arbitrary enforcement of local laws and the risk of wrongful detentions, which spooked the business community.
Concerns about regulatory crackdowns in China have also weighed on the investment community. This month the Chinese Communist Party and the government issued a rare joint statement with 31 measures to improve conditions for businesses, including pledges to treat private firms the same as state-owned enterprises.
While that move won the backing of Chinese entrepreneurs including Tencent Holdings Ltd’s (騰訊) billionaire co-founder Pony Ma (馬化騰), foreign companies are looking for more than rhetoric after two years of crackdowns and pandemic controls. The EU Chamber of Commerce in China said its companies have been accustomed to “sweeping pro-business statements being made with little concrete action being taken.”
The government showed support for private equity and venture capital earlier this month when Chinese Premier Li Qiang (李強) approved the final rules on the 20 trillion yuan (US$2.8 trillion) private fund market almost six years after a draft was released.
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