A top official from the Shanghai exchange recently hinted that mainland companies could sell global depository receipts in Switzerland in yet another move to diversifying China’s financing sources.
«We are preparing to make important efforts in Switzerland going forward and we believe that the first batch of the trial will succeed this year,» said Shanghai exchange’s general manager Cai Jianchun during a panel discussion at the Boao Forum in Hainan.
Although he did not further elaborate on the statement, this was widely viewed as a follow-up to an existing memorandum of understanding between the Shanghai and Swiss bourses in 2019 which included agreements to study the feasibility of listing securities like global depository receipts (GDRs) on each other’s markets.
Notable figures in attendance at the forum included the deputy chiefs of China’s stock market and foreign exchange regulator.
Diversified Financing
If successful, the link would mark the third cross-border stock program China has launched alongside its Shanghai-Hong Kong and Shanghai-London Stock Connect schemes.
Growing tensions with the west have led mainland firms to diversify their sources of finance, most notably away from the U.S. where regulators are implementing rules to delist companies that fail to meet accounting standards – a move widely viewed as targeting China.
Similarly in the U.K., political frictions have limited the success of the Shanghai-London link with just $6 billion of GDRs sold since 2019.
