Why the New Policy for Overseas Financing of the State was Left out of the Civilization of Fujian: We Don't Know It

Although the state's new policy on overseas financing of enterprises has been implemented for more than a month, the privately owned enterprises in Fujian, which are at the forefront of opening up to the outside world, have little knowledge of information blocking, so that only two privatized enterprises have so far enjoyed it. The benefits of the New Deal.
It is understood that according to the "Notice on Relevant Issues Concerning Domestic Investors Financing through Overseas Special Purpose Vehicles and Foreign Exchange Management through Reinvestment" (No. 75 of 2005) issued by the State Administration of Foreign Exchange in October this year, from November, residents in China A special purpose company can be set up to finance overseas. The purpose of the state's introduction of this new policy is to provide a channel for domestic private enterprises to raise funds through international capital markets.
In an interview, the reporter learned that the overseas financing of private enterprises in China is generally registered with a 'shell company' overseas, and then the 'shell company' becomes an entity by financing a piece of foreign company’s assets equivalent to that of the former domestic company through overseas financial institutions. Companies, and then listed overseas, financially funded the development of domestic enterprises. This is the so-called 'red chip listed' road. Before the publication of No. 75 of the State Administration of Foreign Exchange, this was considered as abnormal channel financing. Since some private enterprises became overseas listed companies, the funds raised did not necessarily return to invest in the territory, causing domestic capital outflows. The newly issued Circular No. 75 stipulates that enterprises and residents must first register with the SAFE to complete the identification of the domestic parent company; and the profits and bonuses obtained after the company raises funds abroad should be within 180 days from the date of acquisition. Transferred back to China to complete 'return investment'. This avoids the disadvantages of 'red-chip listing' that caused the outflow of domestic funds, and thus also opens the door for companies to finance outside the country.
Fujian's privatized enterprises in the coastal open areas were originally in need of such an open policy. However, according to the reporter's understanding, only the Sino-Fine Chemical Group and the Xiamen Samda Membrane Co., Ltd. have succeeded in the successful application of this new political listing. . It is understood that the vast majority of Fujian enterprises are family-owned small enterprises, and little is known about national policies.
Some experts have analyzed that the emergence of this phenomenon shows that on the one hand, China's privatized enterprises are still in a naive stage and are not sensitive to macroeconomic policies; on the other hand, they have shown that government agencies at all levels are not adequately aware of the services provided by enterprises. Some government departments have introduced channels for the New Deal only on the website.

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