Chinese Shareholders Confident in Newly-elected Government

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Last updated at: (Beijing Time) Wednesday, March 19, 2003

Chinese Shareholders Confident in Newly-elected Government

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Following his daily routine of arriving at the stock exchange opening time, 53-year-old Shanghai citizen Zhang Baogen came on Tuesday morning to the Yongjia office of the Huaxia Securities Firm in downtown Shanghai.

The only slight difference was the newspaper he carried. Instead of the "Shanghai Securities Daily" that he usually read every day, he had the "Wenhui Daily" with big pictures and introductions to China's newly-elected government leaders on its front page.

The stock market trend after the leadership transition is the hottest topic for Chinese shareholders like Zhang Baogen. "From a long-term perspective, the Chinese share market will definitely keep going up. The healthy development of the share market will have a strong influence on the country's whole economy", he said. With 10 years stock exchange experience, he had always been an optimist, he said.

"The newly-elected government leaders are all people of action, and they will surely find a proper model for the Chinese stock market," noted Zhang.

Many other shareholders shared his opinion. Zheng Huaming, a shareholder at the Shenzhen office of the Wuhan Securities Company said that most of the new leaders of China's State Council came from the grassroots and had practical working experience and a pioneering spirit.

He believed they would consider the interests of all parties and deliver a bright future to the country's stock market.

Dr Chen Shouhong, a researcher at the Ping'an Securities Co. Ltd said that China's capital market was continuing to open to the outside world, which would attract more funds and help improve the capital market itself.

However, some shareholders also expressed their worries over a slow downturn in China's stock market in the past months. "The priority job for the government should be bringing the stock market out of its downturn, which could make it irresistibly attractive to foreign investors," said a consultant company employee surnamed Wang.

He also said the newly-elected government should give policy support to the share market in a bid to solve the shareholders' concerns.

Qiu Yanying, vice manager of the Huaxia Securities Research Institute, is currently writing an article on acquisitions and mergers under the state assets management system, which shows how companies operate acquisitions and mergers under the new system.

He said that during the era of China's third generation leaders, the Chinese stock market progressed from its birth to healthy development. "Although it continues to have ups and downs, it is an undeniable fact that the Chinese stock market is the most brisk market in the Asia-Pacific region," said Qiu.

Qiu believes that the newly-elected government will implement major strategies and regulations to develop China's capital market, and also solve some remaining problems in the next few years.

As the Chinese government takes concrete measures to fulfill its commitment to the World Trade Organization (WTO), more and more foreign organizations will enter China via joint ventures with their Chinese partners in securities companies.

The Chinese government's efforts to introduce Qualified Foreign Institution Investors (QFII) have attracted a large number of overseas prestigious financial groups and investment banks which are optimistic about China's capital market.

Chen Shouhong said many shareholders wished the new government would adopt a series of proper policies to activate the market and ensure fair play by the market.

As for Qiu Yanying, the most crucial issue for the new government concerning the stock market is the way of reducing the proportion of state-held shares.

"Taking into consideration all parties' interests, I expect the newly-elected government to work out a win-win plan and bring the share market into a favorable development", said Qiu.

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