The launch of the Growth Enterprise Market (GEM) is of significant importance to the development of China's capital market. The GEM is one part of China's multi-level capital market system and enjoys broad development potential, said Qi Bin, director of the research center of the China Securities Regulatory Commission (CSRC), recently in Shenzhen.
Qi noted that a number of countries and regions have launched the GEM, but they have different development levels. At present, among mature markets, the GEMs of the U.S. and the U.K. are relatively more successful, along with that of South Korea among emerging markets.
A successful GEM is able to cultivate a large batch of innovative enterprises, he said. For example, NASDAQ fostered a large group of enterprises including Microsoft, Intel and Apple. Most of these enterprises have grown into international-level enterprises and have also promoted the development of the U.S.'s semiconductor, biotechnological and network industries.
Moreover, a successful GEM maintains justice and transparency in the market through strict supervision. The appearance of a vicious and rule-breaking event in the market will flatten the confidence of investors and damage the image of the market. This is especially true for the still-unstable GEM.
Qi believes that while monitoring the GEM, a balance between supervision costs and efficiency should also be considered. A typical example is that of the U.S., which in the past released related laws that increased the cost of listing for small and medium-sized enterprises, causing them to list in the U.K. for several subsequent years. This weakened NASDAQ's international influence.
By People's Daily Online