WATERWAY CONNECTION: A crane moves goods to be shipped outside the country via the Xijiang River golden waterway in Guangxi Zhuang Autonomous Region. Guangxi is facilitating infrastructure construction alongside the river to boost foreign trade (LU BOAN)

OTC Market Expansion

China has decided to expand its over-the-counter (OTC) market to all qualified small and medium-sized enterprises (SMEs), according to an official statement released on December 14.

The State Council announced that the OTC market, a national share transfer system for SMEs that is also known as the New Third Board will be expanded to cover all innovative and promising companies.

Qualified companies can apply for a listing on the board for public share transfers so as to realize equity and bond financing as well as aid in asset restructuring. Companies should ensure accurate and complete information disclosures on their operations.

Qualified enterprises can apply directly to be listed on the New Third Board through China's stock exchanges.

The State Council demanded the China Securities Regulatory Commission (CSRC) simplify approval procedures so as to increase efficiency.

The CSRC will exempt approval procedures for applying joint-stock companies with 200 or fewer shareholders and listed ones with private placement and no more than 200 shareholders, according to the State Council statement.

Home Prices Surge

The price of homes in large Chinese cities continued to rise in November.

All but one of the 70 major cities monitored by the government reported year-on-year increase in new home prices in November, the National Bureau of Statistics said on December 18.

Twenty-six cities reported an annual increase of 10 percent or higher, with only prices in Wenzhou in east China's Zhejiang Province failing to rise.

Shanghai led the race among the 70 cities, with an annual rise of 21.9 percent in November, followed by an increase of 21.1 percent in Beijing, 21 percent in Shenzhen and 20.9 percent in Guangzhou.

New home prices rose month on month in 66 of the 70 cities, compared to 65 in October.

Control Easing

The Ministry of Commerce announced on December 16 that it will further loosen controls on cross-border yuan direct investment.

Under the new regulations, approval procedures for yuan-denominated direct investment from overseas investors will be further simplified. The new regulation will take effect on January 1, 2014.

With cross-border yuan direct investment, foreign investors use legally acquired yuan to make investments in China by founding companies, increasing investments, or participating in mergers and acquisitions of domestic enterprises.

Foreign investors are still not allowed to invest in negotiable securities, financial derivatives, or entrusted loans in yuan.

The existing regulations, which took effect in 2011, require provincial bureaus to report to the ministry for further approval if foreign investors' yuan investment hits 300 million yuan ($49 million) or more, or if their investment is in sectors such as financial guarantees, financial leasing, micro-credit, auctions, cement, steel, electrolytic aluminum or shipbuilding.

The new regulations have no such requirements. Overseas investors also include those from Hong Kong, Macao, and Taiwan.