China opens domestic stock markets to qualified foreign firms for listing

China will support qualified foreign-funded companies seeking to list on domestic stock exchanges under a new action plan unveiled on Monday to strengthen foreign investment, the Chinese government said.

The plan was jointly issued by the Ministry of Commerce, the National Development and Reform Commission, and the Ministry of Finance.

The policy package also calls for faster revisions of regulations governing mergers and acquisitions to facilitate transactions involving foreign and Chinese companies.

In addition to supporting domestic listings, the plan allows qualified foreign equity investment firms to participate in share issuances by certain listed companies, Reuters reported.

The measures are part of Beijing's efforts to strengthen foreign investment amid attempts by policymakers to support economic activity and boost investor confidence.

The announcement came as mainland Chinese equities advanced on Monday. The CSI 300 Index rose 0.7 per cent by midday trading, while the Shanghai Composite Index gained 0.2 per cent.

Market participants pointed to signs of improving corporate earnings and stronger risk appetite among domestic investors.

While mainland markets moved higher, Hong Kong stocks came under pressure. The Hang Seng Index fell 1 per cent as investors weighed the prospect of higher US interest rates and a large volume of shares scheduled to become available for trading following recent initial public offerings.