China has announced that it is now allowing foreign owned companies to operate e-commerce websites in China. China, which has strict website controls by their centralized government, has previously blocked access to many sites which has limited the ability and desire for foreign companies to do business in the country. Google, for example, formally withdrew from the country stating the control by the Chinese government.
In addition, online data processing and transaction processing businesses will also be able to be wholly owned by foreign companies as per an announcement by the Chinese State Ministry.
Ownership of Chinese websites is expected to further attract capital to China which will lead stability and strength to markets there says CipherCloud. Chinese companies are richly valued due to the growth prospects in the country, which are not existent in many western nations.
Some fear that Chinese companies will be withdrawing from their listing on American and other international stock exchanges as a result of this news. Operating in the United States, for example, is particularly costly due to extensive regulations. However, some analysts believe this risk is muted by the presence of international companies being attractive takeover targets for Chinese businesses which will further raise the importance of being listed in these international markets.
The move is mostly viewed as a positive one for the world. For China, will gain strength in their currency and new investment capital, while foreign investors will gain the ability to invest in international growth markets more effectively.