Research On The Path And Economic Effects Of The Return Of Chinese Concept Stocks Under VIE Structure

VIE structure is an overseas financing mode widely adopted by China Equity,which mainly controls domestic operating entities by agreement to achieve overseas listing and domestic interest exchange purposes.However,in recent years,the financial game between China and the United States has entered a white-hot stage.The Foreign Company Accountability Law has had a serious impact on the information disclosure and data security of the Chinese stock market,and the frequent shorting of the Chinese stock market by third-party institutions has reduced the living space of the Chinese stock market in the United States,triggering a return tide again.In the past,the shares with VIE structure were mainly returned to the domestic capital market through traditional routes such as direct IPO,backdoor listing,and split listing.Most of the routes involved the removal of VIE structure,which greatly hindered the willingness and speed of the return of enterprises in terms of cost and difficulty.In order to attract more high-quality shares to return and realize the strategic layout of developing the new economy,China has also carried out necessary institutional innovation and multi-level capital market construction in a timely manner.On June 6,2018,the Administrative Measures for the Issuance and Trading of Depositary Receipts(for Trial Implementation)issued by the CSRC provided the possibility for the return of the VIE structure of the Chinese stock market,and laid the institutional foundation for the issuance of Chinese Depositary Receipts.On October 29,2020,No.9 Company became the first issuing enterprise of Chinese depositary receipts,and at the same time initiated the return of the A-share retained VIE structure.This successful case provides a new return idea for the majority of overseas VIE structure.This paper takes the case of No.9 Company’s return to A-shares through issuing Chinese depositary receipts as the research object,takes the retaining of the VIE structure as the starting point of the research,and combines the literature research method,case study method and event study method,on the basis of market timing theory,life cycle theory and multi-level market theory,to conduct a comprehensive study on the motivation,path and economic effect of No.9Company’s issuance of Chinese depositary receipts.This paper studies the background basis,operation mechanism and practical effect of issuing CDR from the five perspectives of necessity,practicality,feasibility,limitation and practicability,and finally concludes that issuing CDR is feasible to some extent,but there are two sides for the general shares in the VIE structure,which need to be carefully considered.Based on the above research,in order to encourage the return of general shares in the VIE structure and promote the construction and improvement of the domestic capital market,this paper also puts forward countermeasures and suggestions to the VIE structure enterprises and relevant domestic regulatory authorities that are preparing to return: first,enterprises should decide whether to retain the VIE structure according to their actual capabilities and characteristics.If they choose to retain the VIE structure,they should make clear disclosure and improve their core competitiveness to meet the basis and standards of issuing CDR;At the same time,domestic regulatory authorities also need to pay close attention to the rights and interests protection measures of investors,strengthen the construction of CDR and the conversion mechanism,and determine and improve the relevant rules of the agreement control mode at the legal level as soon as possible.I believe that under the background of the domestic capital market tending to improve and vigorously developing the new economy,we can attract more high-quality Chinese stocks to return and share the dividends of economic development.