New stock market reforms will now allow unprofitable Chinese companies to list on domestic exchanges, Caixin Global reports, in a bid to make investment more accessible to small, innovative companies in the tech sector.
Previously, Chinese companies hoping to go public on one the country’s two stock exchanges would have to demonstrate a history of profitability to the China Securities Regulatory Commission (CSRC).
The changes, on a trial period until the end of the month, will hopefully entice innovative companies in growing industries to list in China, where traditionally offshore markets have been a more open source of capital.
In a statement released last week, the CSRC said “the existing listing criteria can no longer meet the needs of innovative companies and urgently need to be improved through reform so that the capital markets can better serve the real economy, support the country’s strategy to promote innovation and cultivate new growth engines for the economy.”