More Chinese companies prefer listing to borrowing

Beijing's efforts to increase borrowing costs make Chinese companies turn to equity markets for financing, a survey has found.

Encouraged by the optimistic prospects for the overall economy and the equity markets, a significantly greater proportion of Chinese companies are seeking a public listing as a way to finance their growth, compared to those that are opting for bank loans, Grant Thornton has found in a survey.

The efforts by Chinese authorities to curb inflation have “led to a tightened money supply and an increase in the cost of loans, making more businesses turn to other means of financing. We believe that in 2011 we will see more mainland businesses undertaking merger and acquisition MA activities and seeking to list in Hong Kong,” said Barry Tong, a partner of transaction advisory services,...

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