Cutting down State-owned Shares Indicates Government Has Courage to Admit Mistake

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Last updated at: (Beijing Time) Monday, March 04, 2002

Cutting down State-owned Shares Indicates Government Has Courage to Admit Mistake

When interviewed by reporters on March 3, Xiao Zhuoji, CPPCC member, also a renowned economist, indicated that the key point for cutting down state-owned shares is what principles to be stuck to instead of what time to conduct it. The Chinese government's halt on cutting down state-owned shares shows that it has courage to admit mistake during the course of formulating and conducting policies.

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Three principles for state-owned shares to follow

When interviewed by reporters on March 3, Xiao Zhuoji, CPPCC member, also a renowned economist, indicated that the key point for cutting down state-owned shares is what principles to be stuck to instead of what time to conduct it.

He noted three principles should follow when cutting down state-owned shares: State-owned assets can't be run off and they must be kept in value; Markets are able to support it and shareholders are all benefited. The benefit is supposed to go both to big holders (investing agents) and individual holders.

Government halts inappropriate policy

He believed the price after cutting down is still unreasonable if going in for trade according to that of market. The Chinese government's halt on cutting down state-owned shares shows that it has courage to admit mistake during the course of formulating and conducting policies.

Surrounded by foreign and domestic reporters on the steps of the People's Hall just before the opening of the 9th CPPCC Sessions, Xiao said he holds prudent and optimistic attitudes towards China's current stock markets. Chinese economy maintains a healthy development, providing a good macro basis. China's listed companies, unlike the rumor spread that all of them involve in problems, are mainly running well. Loss-making enterprises only account for 10 percent of the total number. Currently China has enormous financial assets, deposits amounting to over 700 billion yuan, a sum sufficient to back up the carrying on of China's stock markets.

China Starts Sale of State-Owned Shares

China has formally started the sale of state-owned shares in listed firms after a failed pilot program in 1999.

Three firms -- Jiangsu Suopu, Changzhou Chemical and Shaogang Songshan -- have become the first to sell part of their state shares in accordance with provisions issued by the State Council in early June.

In separate announcements for the issue of A shares, the firms said they will sell to the public state shares equivalent to 10 percent of the capital to be raised from the issues. >>details

by PD Online Staff Yang Ruoqian

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