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Capital Market Enters New Stage: Expert
China's capital market has entered a new stage of development in which market forces, instead
of administrative power dominate, a prominent financial scholar said in Beijing January 6.
Wu Xiaoqiu, director of the Financial and Securities Institute (FSI) under the prestigious Chinese People's University in Beijing, made the remarks during his keynote speech at the Fifth China Capital Market Forum co-sponsored by the FSI and the Galaxy Securities, a major Chinese securities house.
Quoting an annual report by the FSI, Wu said the past decade has laid a solid foundation for the development of China's capital market.
By the end of November 2000, China had had 1,063 domestically listed firms, with total capital of 4.6 trillion yuan.
The country also has one of the most efficient securities trading systems in the world, and has established the essential legislation and regulatory framework.
However, he pointed out that as the country's economy is changing from a centrally planned economy to a new market economy, its securities market still carries many non-market characteristics.
Wu estimated that it would take five to 10 years for China to "marketize" its securities market, which will then enter the "internationalization stage" before it can eventually become an integrated part of the world capital market.
He stressed the importance of having people with innovative minds, regulatory systems and investment tools for solving various problems afflicting the country's capital market.
Wu called for further reforming the stock issuance system, improving the corporate governance structure of listed firms through the introduction of independent board members and the reduction of state shares, and establishing a delisting system as soon as possible to improve the market's efficiency in resource distribution.
He also made a point of the development of derivative financial products, especially stock index futures.
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