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blank.gif (49 bytes)15/06/1999, updated at 16:00        blank.gif (49 bytes)weather.gif (982 bytes)archive.gif (946 bytes)search.gif (947 bytes)


Standardizing Stock Market Development With Firmer Confidence

  This article by Our Guest Commentator analyzes and comments on the recent rise in the stock market quotations. Since May 19, the Chinese stock market, which has undergone readjustment for two years, has begun to witness a fairly big rise in market quotations. A correct understanding of this situation, the commentary says, is of important significance to further strengthening investors' confidence, stabilizing and developing the securities market and promoting reform and development. The article focuses mainly on the following three points:

  I. The recent rise in stock market quotations, which reflects the actual condition of the macro-economic development and the inherent demand of market operations, is a normal, restorative rise.

  Approached from the perspective of the macro-situation, the recent stock market reflects the actual condition of economic development. Along with the gradual demonstration of the effect of the various policies and measures taken last year by the state to increase investment and expand domestic demands, this year's economic development has maintained a good momentum and the economic growth structure has undergone active changes. Particularly under the environment featuring the turbulent international situation, China still maintains a favorable situation in social, political and economic stability, developing the economy and expanding strength has become the common understanding of various quarters. The recent development trend of the stock market reflects the general public's good anticipation of the development of the situation.

  II. A foundation for the long-term, steady development of the securities market is of paramount importance to promoting reform of state-owned enterprises and the modernization drive.

  Over the past eight years, our active effort in exploring ways for the development of China's stock markets under the guidance of Deng Xiaoping Theory has played an important role in promoting reform of state-owned enterprises and economic development. Firstly, it has expanded the fund-raising channels for state-owned enterprises and improved the financial situation of listed firms. Secondly, through structural reform and listing, state-owned enterprises have, in compliance with the requirement for a modern enterprise system, transformed the operational mechanisms, established a corporate management structure and gradually ensured scientific decision-making, marketization of management and socialization of supervision, thus expediting the enhancement of economic efficiency. Thirdly, it helps optimize the allocation o social resources, promote the readjustment of the economic structure and the strategic reorganization of the state-owned economy. And fourthly, through supporting new and high-tech enterprises in listed securities on the market, it has promoted the new and high-tech industrialization development and technological progress.

  Practice has proved that the stock market has become an indispensable, important component in the socialist market economic structure. At present, China's macro-economy maintains a sound development, providing a good foundation for the long-term, stable development of the stock market.

  Since 1996, in order to standardize the development of the stock market, concerned departments have successively adopted a series of effective measures to legally investigate and deal with acts in violation of laws and regulations, to regulate the market operational order and actively guard against and defuse market risks.

  III. Various quarters should cherish the hard-earned favorable situation in the stock market.

  Historical experience has proved that to maintain the sustained and steady development of the stock market and give a better play to the functions of the stock market, it is essential to uphold the principle related to the legal system, supervision, self-discipline and standardization, persist in seeking development on the basis of standardization, conscientiously protect the investors' interests and guard against market risk. At present, it is all the more necessary to cherish the hard-earned favorable situation, persist in managing the market and standardizing its operation according to law.

  In line with the requirements of the Securities Law, it is imperative to further strengthen the standardization construction of the securities market and conscientiously raise the level of market supervision and management. At the same time, based on the actual condition of the development of China's stock market, it is essential to actively adopt necessary policies and measures to promote the growth of the stock market.

  At the turn of the century, China's stock markets are faced with a rare opportunity for development. The standardized development of the stock market is not only conducive to the general situation regarding reform and development, but also concerns the vital interests of the stock market participants. Let's unify our understanding, reinforce confidence, make common efforts and carry a viable, vigorous stock market into the 21st century.

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