For competitive companies such as Little Swan, the Party's plan to accelerate the development of China's capital markets will be a boon. After four years of debate, Beijing seems ready to enact a securities law establishing a modern regulatory system for its nascent stock exchanges in Shenzhen and Shanghai. The government also is pushing many of its best companies to list overseas. No matter that many investors got burned in the initial wave of China stock offerings a few years ago. In anticipation, city and provincial governments across the country are furiously reorganizing holdings from tractor makers to toll roads and restaurants in the hope of losting them in Hong Kong.
Foreign investors stand to play a much bigger role in financing infrastructure.
Beijing is counting on a quarter of that sum coming from overseas. And giant investment funds backed by American International Group, Peregrine Investment Holdings, and New World Development are pouring billions more into road, port, and bridge projects around the country. While all of this dealmaking is rapidly helping China ascend the capitalist learning curve, the government wants to stage-manage the process as much as possible. Thanks to a stock listing in Hong Kong, Yanshan has gained the financial clout for more acquisitions. Others include Shanghai Textile Shareholding Group Co., the result of mergers involving 241 companies, and Shenzhen Konka Electronics Group, a television maker that recently took over rivals in three provinces.