China Is Gearing Up for Corporate Governance

我们正在踏上全球市场的新时代 - 可能在中国核心中国越来越纳入全球金融体系的新时代。随着国家重新平衡其经济，internationalizes its currencyand allows greater foreign participation in its capital markets, decisions made in Beijing will have a greater impact on investors’ portfolios. Despite recent market volatility, we at Investec Asset Management believe that now is the time for investors to understand the global effects of China’s economic transformation and the possible long-term implications for their portfolios.

For international investors, the liberalization of China’s onshore capital markets provides exciting opportunities, as well as many challenges, particularly when it comes to understanding local corporate governance practices. But unfamiliar local legal and cultural contexts often present hurdles to investors entering new markets, and China is no exception.

中国公司治理做法正在进行一段变革。北京专注于强制执行市场滥用法规和提高业务诚信。最近访问深圳证券交易所后，北京热衷于改善国内公司吸引海外资本的治理声誉。当地的机构投亚博赞助欧冠资者也表现出更积极的所有权方法的迹象，并开始与中国公司携带，包括state-owned enterprises。这些变化将是什么意思，对于公司和投资者来说意味着什么？

通过改革中国的国有企业，北京正在寻求减少政府参与上市实体并用更管理的方法取代国家监督。政府希望鼓励更多样化的董事会结构，通过销售权益对私人和机构投资基金来增加独立董事的代表性。我们认为国际投资者渴望看到这一进步。

中国的两个主要证券交易所，上海证券交易所and the Shenzhen Stock Exchange, also need to be included when assessing governance issues. There are plans to make the Shenzhen exchange itself a listed company and extend the上海港股股票连接program to this bourse to attract and facilitate further foreign investment in mainland China. The Shanghai exchange has already conducted some basic due diligence on prospective initial public offerings, as well as promoted governance training and electronic voting. The ability to vote electronically is particularly important, as the vast majority of shareholders on the exchange are retail investors. Electronic voting would help overcome some of the geographical challenges in a market of this scale and encourage shareholders to exercise their rights. The number of electronic voting sessions in China has grown more than tenfold since 2005. The Shanghai exchange has also focused on “open day” activities, in which investors can meet with companies.

Another key area of focus is the reform of auditing practices. In March the State-Owned Asset Supervision and Administration Commission of the State Council, China’s top regulator for state-owned enterprises, announced plans to launch a bidding process for independent accounting firms to conduct audits of SOEs’ overseas units. The so-called Big Four accounting firms — Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers — are likely to be excluded from this procedure as they will already have audited state-owned enterprises and overseas subsidiaries in the past three years. This reform should be well received by those who have concerns over financial management of state-owned enterprises both in general and with regard to their foreign assets. According to the Asian Corporate Governance Association, an industry body, as of the end of 2013, SOEs had accumulated more than 4.3 trillion yuan ($676 billion) of overseas assets. The challenge with this initiative may be that the stakes of state-owned enterprises in foreign businesses are sometimes small, and foreign governments might not allow third-party audits.

在我们看来，公司治理空间在中国有一个有趣的时期。由于政府执行更高的治理标准，国内股东推动董事会的更多问责制，新型模型可能会发展，这可以为投资者提供更好的透明度和管理和股东之间更大的互动。这些变化也将为投资者提供学习曲线。中国独特的法律和文化环境可能会促使外国股东对外籍股东不熟悉的治理规范，但适合采用它们的公司。

然而，随着我们在其他市场的效果，董事会结构的根本变化 - 例如包括独立董事，以增加价值，代表包括少数股东在内的外部利益攸关方，并在监督和控制中提供正确的职能 - 这是很长的过程。希望如此中国将继续破解腐败and open its financial markets to foreign investment, which should provide an opportunity to review and update fundamental principles around good governance, including transparency, shareholder rights and structures that support the accountability of management, effective oversight and control.

Therese Niklasson is global head of environmental, social and governance atInvestec Asset Managementin London and a contributor to itsInvestment Institute最新的中国研究。

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