Experts Suggest a Beijing BoardAfter Beijing lost the opportunity to host the nation's second-board market, a group of experts have suggested setting up a third board in the capital's Zhongguancun Science and Technology Park."Beijing boasts the country's high-tech symbol -- Zhongguancun, China's largest technology exchange and trade centre and complete securities trading automatic quotations system, which are regarded as necessary and advantageous factors for a stock market," said Lin Geng, director with the market department of Beijing Technology Exchange and Trade Centre. According to Lin, compared with the second board, the "threshold" of the third board would be much lower in terms of enterprise scale, capital conditions and operation performance. Since the third board stands at a original stage for a stock market, which requires all businesses to be operated over the counter, the issuance price, stock circulation and business risks might not be as equal as the second board. Actually, before the Central Government's decision to locate the second board in Shenzhen, a group of experts suggested "two main board markets and two second board markets" with the two main ones in Shanghai and Shenzhen and the two second boards in Beijing and a city in the country's west. "The proposal aimed to break down monopoly and create a competitive atmosphere in the domestic stock market," said financial economist Liu Jipeng. Monopolies leave room for low-efficiency, corruption and unfair competition, say analysts. Liu said most people have paid great attention to the consolidation trend on the international finance market. "But, we must acknowledge that the consolidation was the result of competition for a long time and the competition period should not be omitted for sound and long-term development of China's stock market," Liu said. "Consolidation is not the synonym for monopoly, hence opening a third board in Beijing is not only a necessary and long-sighted choice for China's stock sector but also offers robust capital support for the high-tech enterprises," he added. With the Shenzhen choice for the second board, experts say they are worried that bringing in funds from the new stock market to Beijing's Zhongguancun Science and Technology Park -- China's largest high-tech park -- would become more difficult than expected. Though China Securities Regulatory Commission said the choice of the second board host is not important, insiders pointed out that nobody can ignore the impetus to the local economy given by the stock market. "In addition to convenience for the local enterprises entering the market and the fiscal revenue contributed by a stock market to the local government, the invisible market's settling and completing systems are expected to introduce hefty funds," Liu said. The economist cited the rapid development of Guangdong and Shanghai as examples, the location of the two national exchanges. During the Ninth Five-Year Plan (1996-2000), the annual capital supply and demand gap in Zhongguancun reached 2 million yuan (US$240,000), according to an official of the park's administrative committee. As new high-tech enterprises mushroom and older firms rapidly develop, the gap is expected to at least double during the next few years. Zhang Guilin, deputy director with the committee said since high-tech has become the pillar industry for Beijing, the future of Zhongguancun will inevitably influence the city's economy. Source: China Daily |
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