International board to "A" Do not "B"

Lu Guihua, professor of Accounting College, Central University of Finance and economics Why should China's capital markets be internationalized? What are the benefits of internationalization? How to internationalize?　　With the Shanghai municipal government and Shanghai Stock Exchange respectively said to vigorously promote the international board construction, these problems naturally into the eyes of people.　　Shanghai municipal Government and SSE, the reason is keen on the internationalization of SSE, its motives, and Zhejiang Yiwu Small Commodity market motivation is the same, for enterprises and investors at home and abroad to provide trading "booth", charging booth fees. From the macro-level of China's economic development, now we have more foreign exchange, and is still growing, how do we spend? We take this money abroad to buy goods, this is the foreign exchange expenditure under the current account; we can also go abroad to buy shares, this is the foreign exchange expenditure under the capital account; We can also let foreign companies come to China to issue shares, and we buy them, which is also the foreign exchange expenditure under capital account. We can go out to buy stocks, why not let them come to our country to sell stocks?　　Internationalization helps us balance the balance of payments gradually. Then, foreign companies (including red chips companies) to our country to sell stocks, where to sell? Of course, a stock market is often worried that a a-share market is high, that is not to let foreigners circle money? So it is recommended to share B listing. This view is not correct. Our reason is: First, why is a a-share price high? Why is the B-share price low? Because a shares are domestic investors, and B shares are bought by some international investors, a-share investors are willing to pay high prices, while international investors are unwilling to pay the price. As long as domestic investors buy, whether the foreign companies in a a-share or in the shares listed, its issue price is likely high. So the key question is not where the foreign companies sell their stocks, but who buys them.　　Therefore, it is more important to educate a a-share investor to change the structure of a-share investor, that is, to raise the proportion of institutional investors in a-share market. Second, B shares were originally associated with a shares, because we need foreigners to buy our stocks, we need dollars.　　And now we buy their shares and give them dollars, which is clearly two issues, so the B-share market exists in the original intention of facilitating domestic companies, rather than facilitating foreign companies. Third, B-share, in essence, is equivalent to opening a separate trading area or booth for foreigners to trade the shares that our company issues. This is a temporary expedient for the initial stage of market development. Internationalization is to represent our market more mature, more advanced, and as the market matures, separate open a trading area, and market maturity is incompatible. So the future of the B-share market, as our capital market matures, tends to disappear.　　Why should we put the international board in an area that is about to disappear? Therefore, I believe that the overseas companies to a a-share listing, should become China's capital market is the correct way to internationalize.