The establishment of China's long-awaited second-board market has been put off for further preparations, the head of the country's top securities market watchdog revealed yesterday.
"We will launch the second-board market at an appropriate time...but we have not set a definite timetable for it," said Zhou Xiaochuan, chairman of the China Securities Regulatory Commission.
He made the remarks while answering inquiries from Hong Kong deputies attending the ongoing session of the Ninth National People's Congress (NPC).
Zhou attributed the delay to the negative influence of emerging instability in the new economy all over the world.
"The determination of top policy-makers (to set up the second-board market) has been affected by the changes," Zhou said.
The chairman said worries about high risks from and in the new high-tech sector have led to further debate on whether the country is really ready to launch a high-tech board.
Shenzhen has been making preparations for the second-board market ever since the idea of spurring the development of high-tech firms through venture capital was raised at the National Science and Technology Conference in 1999, according to Zhou.
"But there are still doubts about whether the time is ripe (to launch the second-board market) and whether we can launch it with confidence," he acknowledged.
"So we need more careful and far-sighted preparations," Zhou added.
Economist Xiao Zhuoji once said that the country would officially launch the new bourse within the year.
There are now more than 70,000 high-tech firms on the mainland and about 2,000 to 3,000 of them are hoping to make initial public offerings on the new market, according to Xiao.
Zhou said his commission is also making preparations to make State-held stocks and stocks held by legal persons in listed firms tradable as a major effort to increase equity flow in the stock market.
Currently, State-held stocks and stocks held by legal persons in listed firms are not allowed to be traded on the Chinese stock market, which has greatly limited the volume of traded stocks.
The chairman said some economists, securities experts and insiders have long been calling for the move.
"But we should move very cautiously and gradually," he said.
As the move directly involves the ownership structure of listed firms, it may take a long time to realize, Zhou added.
He said his commission's preparations, both on the legal and operational sides, aims at preventing any shocks to the stock market once untradable stocks are opened to investors.
(China Daily 03/07/2001)
