China will set up markets for high-tech securities on the Shanghai and Shenzhen stock exchanges this year in support of the development of high-tech enterprises.

Zhou Zhengqing, chairman of the China Securities Regulatory Commission (CSRC) made this remark at an ongoing conference in the Chinese capital.

According to Zhou, these high-tech markets will have their own stock indices.

The quota system for initial public offerings (IPO) will be abandoned and replaced by a system under which the chief underwriters will take more responsibility, Zhou said.

He noted that it remains the government's policy to encourage enterprises going public to raise funds in order to promote state-owned enterprise (SOEs) reform and economic development.

Moreover, he said, although all kinds of enterprises will be allowed to issue stock as long as they meet the required conditions, yet, priority will be given to SOEs.

This year, the government intends to encourage mergers and takeovers among listed firms as a way to improve their performance.

Furthermore, he acknowledged that the government is considering exit mechanisms for listed firms that have been losing money for three consecutive years.

The unsatisfactory performance of some listed firms has become a major topic of concern among both economists and investors in China.