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Nation to continue share reform orderly
(Xinhua)
Updated: 2005-11-11 15:14
China said Thursday it will continue the country's ongoing share reform in an
orderly manner and on the basis of maintaining stable development of its capital
market while protecting the legitimate rights of investors.
Participants at a meeting held by China's Share Reform Leading Group
comprising of five ministries said the reform has been going on smoothly since
the Chinese government approved the pilot share reform on April 29 of this year.
The five ministries or commission include the China Securities Regulatory
Commission, the country's securities watchdog and China's State-owned Assets
Supervision and Management Commission, which controls the country's leading
State-owned enterprises that dominate most economic sectors.
Provincial officials in charge of the reform also attended the meeting, which
called for continuity of policies to ensure the success of the reform.
The Chinese government published a nine-point strategy to revive the capital
market in February, 2004, stating that a sound and healthy capital market is
essential for the country's economicreform and development.
China's two stock markets, which were created 15 years ago in Shanghai and
Shenzhen, respectively, have fallen continuously since 2001. Poor corporate
governance and untradable state shareproblems have been blamed for the poor
market performance in the past few years.
The ongoing reform was designed to make the untradable shares,about twice as
much as the tradable ones, tradable through arrangements between the listed
firms or their controling share holders and public investors.
Under the arrangement, most listed firms or majority stock holders pay
compensation to minority stock holders in exchange forthe mass untradable shares
held by the firms or the majority stockholders to be able to be floated on the
market.
Minority stock holders were given about two to four shares incompensation for
very 10 shares they have.
The Chinese national legislature recently amended the country's securities
and corporate laws in a bid to crack down harder on crimes involving securities
and give state-owned firms greater access to the capital market.
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