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Deferring of GEM Will Affect Promising Chinese Enterprises: Expert
Fan Gang, famous economist, gave a brilliant speech focusing whether the GEM (growth enterprises market) can succeed in China, whether the second board market will soar or dive and whether the private enterprises can be managed well, at the "2001 China Capital Market Celebrities Forum" held recently in Shenzhen. In his speech, Fan pointed out that repeated deferring of the GEM will probably neglect or even hold up the development of some enterprises with bright prospects in China.
According to the Securities Times, Fan considers some differences between China's enterprises for the second board market and those of the US and HK: most of the 230-odd enterprises that had applied for GEM and entered the final examination of the country have reported profits. They are private enterprises run on their own which are in their peak growth period and dealing with traditional industry. The three characteristics show that these enterprises are most promising in China. When should establishment of GEM be delayed time and again, these enterprises would have been deprived of the favorable opportunities. That will be a bitter matter.
Fan Gang pointed out that bubbles in economy usually occur in the initial period of the development of new technology when people hold high expectations yet have no sufficient understanding of the commercial mode and the means of profits. However, the shattered Nasdaq bubbles just provide China with an absolutely good opportunity to develop GEM because both government and investors have had deep understanding towards risks. They have accurately understood that the time when bubbles of the stock market occur is just the very moment for the development of hi-technology; expectations towards high profits will necessarily nurture high risks.
By PD Online Staff Du Minghua
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