Today, there are 29 Chinese mainland-based companies listed on the Nasdaq, most of which are dotcoms. Granted, that's still a small share of the 3,200 companies listed on Nasdaq, but the market is certainly reaching out to China.
Nasdaq is planning on opening an office in Beijing to serve as a liaison for start-ups needing support from capital markets. This would also allow Nasdaq to keep an eye on the corporate and economic landscape, watching out for high potential companies for listing.
Lawrence Pan, China Chief Representative of Nasdaq, is himself a magnet for Chinese companies looking to raising money on the public market.
In this interview, Pan discusses the role of Nasdaq and why it is increasingly attractive for Chinese companies looking to going to market.
What is the status of Nasdaq's plans in China?
Pan: Preparations for the China representative office are still in progress. The key, however, before Nasdaq can become widely recognized in China, is to make sure that its services are not subject to a time difference. Synchronous processing is essential as stock exchange trades must be carried out immediately, with no delay. But localized service is also a big plus.
What are your main responsibilities as Nasdaq's chief representative in China?
I have three main responsibilities. First of all, I spend most of my time ensuring the provision of good service to the 29 Chinese listed companies. This responsibility is set to expand as the number of China-listed companies will only increase in the future. These Nasdaq-listed companies are our customers and they deserve the best service possible. Nasdaq is a stock exchange with many operating rules, and these companies are often in need of guidance, assistance and supervision.
My second responsibility is the development of new companies [for listing]. At present, the Chinese mainland companies listed on the Nasdaq include not only dotcoms, but also mass consumer-oriented companies such as Ctrip.com and Shanda Interactive Entertainment Ltd., value-added service providers, media operators, software vendors, biotech equipment providers and manufacturers. The board should list the best-performing companies. The listing of unhealthy businesses may have an adverse impact on their strongly performing peers, so it remains a demanding task to select the right ones.
Thirdly, I am responsible for the maintenance of broad-based communications with many parties in financial, securities, industrial and commercial sectors, as well as the central and local governments.
Do you foresee any adjustment to your China strategy?
In total there are 340 non-American companies now listed on Nasdaq, of which 29 are from China's mainland. If those originating in Hong Kong and Taiwan are included, the number of Chinese companies rises to 50. This is not a bad proportion.