Beijing Unveils New Measures for Improving Quality of China’s Listed Companies


The State Council has issued a new directive for driving improvements to the quality and corporate governance levels of China’s listed concerns.

On 9 October the State Council issued the “Opinions Concerning Further Raising the Quality of Listed Companies” (国务院关于进一步提高上市公司质量的意见).

The Opinions outline a range of measures for raising the corporate governance of listed companies and increasing the cost of legal breaches by listed companies and their affiliates.

Yan Qingmin (阎庆民), deputy chair of the China Securities Regulatory Commission (CSRC) said that the Opinions sought to facilitate “improvements to the quality of listed companies and the creation of standardised, transparent, open and flexible capital markets via in-depth reforms.”

“The overall goals proposed by the Opinions are to ensure that the standardised operation of listed companies markedly increases, the quality of information disclosures continually improves, and outstanding problems are effectively resolved.”

According to Yan further improvements to the corporate governance of listed companies can be summarised by the concept of the “Fourth Furthers” (四个进一步), which include:

  1. Further raising the trust and implementation of duties by controlling shareholders and actual controllers;
  2. Further strengthening baseline requirements for corporate governance;
  3. Further guiding best practice in corporate governance;
  4. Further strengthening and raising the transparency of corporate governance.

The 17 Measures outlined by the Opinions include:

  1. Standardising the internal controls for corporate governance,
  2. Raising the quality of information disclosures,
  3. Supporting the listing of high-quality enterprises,
  4. Expediting market-based mergers and restructurings,
  5. Improving the financing system for listed companies,
  6. Improving incentive and restraint mechanisms,
  7. Strict supervision and regulation for market withdrawal,
  8. Expanding and diversifying channels for withdrawal,
  9. Actively and steadily resolving share pledging risk in relation to listed companies,
  10. Strict disposal of problems in relation to guarantee breaches and misappropriation of funds,
  11. Strengthening policy support for dealing with major contingencies,
  12. Expanding enforcement strength,
  13. Driving increases in the rule of law,
  14. Ongoing increases in the effectiveness of regulation,
  15. Strengthening the primary responsibilities of listed companies,
  16. Driving intermediary organisations to properly perform their duties.
  17. Concentrating the capabilities of all parties to improve the overall regulatory system for listed companies.