Listing of Non-State Firms UrgedNon-State enterprises should have equal access to the stock market so that more qualified firms can be listed regardless of their ownership type, experts said."The stock market should not be monopolized by State firms," said Lin Yifu, director of the China Centre for Economic Research of the Peking University, at a recent seminar on the future of China's stock market in Beijing. Lin was urging for more support for private, small and medium-sized enterprises in China. He said too much government interference and policy hurdles have increased the burden on listed firms. Breaking the State monopoly would also help curb speculation on the bourses, he said. "A major reason for the strong speculative sentiment in China's stock market is poor corporate performance," said Lin. Some of the companies do not pay dividends regularly so investors have turned to speculation of stock prices to make profits. Experts said regulators should encourage more better-performing enterprises, either private or State-owned, to seek public listing, to boost long-term investment among investors. Zhou Xiaochuan, chairman of the China Securities Regulatory Commission, also said recently that listing applicants should exercise real corporate governance to ensure that they use a standard practice and avoid insider control and irregularities. On the other hand, besides the stock market, other financial markets should also be developed simultaneously to meet the fund demands of different enterprises, added Lin. Even in developed countries, much corporate finance is still backed by bank loans, he said. Therefore, more support of banks, especially small and medium-sized banks and other financial institutions, is equally as important for enterprise reform, said Zhou Qiren, also a renowned professor with Peking University. He noted that competition from other financial markets would encourage the stock market to rebuild order and improve efficiency. But he also admitted that banks should promote financial innovation to attract more customers. A more flexible interest rate scheme, for example, will help better allocate resources. Experts also suggested the development of local exchange centres and over-the-counter stock trading. Regarding the ongoing debate over the function of the stock market, experts said the debate is a good thing as it will help uncover problems and rationalize investment sentiment. The verbal war was fuelled by blasts from Wu Jinglian, a leading economists in China, over strong speculation in the bourses and irregularities like price manipulation. While another group of experts emphasized that it is normal for a young stock market to have such problems and the present focus should be put on how to further develop it instead of an overall crack down. Source: China Daily |
| People's Daily Online --- http://english.peopledaily.com.cn/ |