Authored by: Jiang Zhihui, Jonathan Grant, Tom Harrison and Liu Juncheng
We have previously summarised the key pathways for foreign investors to acquire A-shares of Chinese companies listed on the Shanghai and Shenzhen stock exchanges (see previous alert: China removes quotas for foreign institutional investors under the QFII and RQFII schemes). As noted in that alert, a key available pathway which has long existed is the ability to purchase A-shares of listed companies by way of “strategic investment”. This regime has historically been aimed at investments of at least 10% in a listed company, and subject to other stringent requirements, which has limited its suitability to a specific set of material transactions. Since the regime commenced in 2005, foreign investors have completed a total of approximately 600 transactions with A-share listed companies through the strategic investor pathway.