China’s Commerce Ministry says it has proactively dealt with US trade frictions

China’s Commerce Minister Zhong Shan. (Reuters)

• The new registration-based IPO system in the newly amended law — which comes into effect on March 1, 2020 — requires strict information disclosures from companies seeking to list

BEIJING: China’s Commerce Ministry has “proactively dealt with” trade frictions with the US this year, it said on Sunday after an annual work conference.
The ministry has implemented the decisions of the central government and “resolutely safeguarded the interests of the country and the people,” it said in a statement on its website.
The US and China cooled their trade war this month, announcing a “Phase one” agreement that would reduce some US tariffs in exchange for what US officials said would be a big jump in Chinese purchases of American farm products and other goods.
China’s Commerce Ministry has said it is in close touch with the US on signing the trade deal, and both sides are still going through necessary procedures before the signing.
Separately, Chinese lawmakers on Saturday agreed to slash red tape for initial public offerings (IPOs), approving an amendment to the country’s securities law that also aims to better protect investors and prevent insider trading.
Mainland authorities have recently stepped up moves to attract listings of big tech firms, including launching a new technology board in Shanghai in July, as the country’s economy has stuttered to its slowest rate of growth since the early 1990’s.
The new registration-based IPO system in the newly amended law — which comes into effect on March 1, 2020 — requires strict information disclosures from companies seeking to list.
The listings however do not need approval from the China Securities Regulatory Commission (CSRC), according to a draft law published Saturday.
It has also removed the need for companies to be profitable before listing.
The revised law includes better protections for minority investors, said Gong Fanrong, director of the finance committee legal team under China’s National People’s Congress.
It calls for companies to establish dispute resolution mechanisms to address shareholder grievances and improve transparency, he added.
Companies found guilty of making false or misleading statements or withholding important information from shareholders could face penalties ranging from one to 10 million yuan ($ 143,000 to $1.4 million).
It also includes tougher punishments for securities fraud and insider trading.
Individuals found guilty of insider trading will be fined two to ten times the value of their ill-gotten gains.
Intermediaries and professional services firms found guilty of faking information during IPOs will be fined 2 million to 20 million yuan, compared to 300,000 to 600,000 yuan at present.
The law also says securities industry employees, including regulators and those who work for brokerages or stock exchanges are bared from trading in stocks.
Lawmakers have debated amendments to China’s securities law for nearly 5 years.