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CHINA> National
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Against the tide
By Mao Lijun (China Daily)
Updated: 2008-07-14 08:36 Support Though the market is no longer a policy-driven market, it needs support from the government as never before, economists say. Instead of short-term policies, the government should help to repair the systematic flaws in the stock market to revive the market, says Wu Xiaoqiu, director of the Finance and Securities Institute at Renmin University of China. "The government should help resolve defects in the system and perfect premature measures which were exposed during the market's recent difficulties," says Shen Peilong, vice-dean of School of Finance with Shanxi University of Finance and Economics. It has been suggested that the government should intensify supervision of listed companies, improve quality of the companies, build measures to protect investors' interest and diversify the products in the market. In fact, the Chinese government has already made greater efforts this year than ever before to reform the bourses and boost the market. The second board is ready to open which could facilitate listing of smaller and private companies. The stock issuing system was upgraded to ensure that public offerings reached more reasonable prices. Special panels were established throughout 2008 to implement the proposed reforms. Fund companies had their mutual fund products approved much faster and more easily. Insurance and pension funds got wider access to stock investments, providing a fresh source of funds. Securities companies were allowed to increase short-term financing with banks. The information disclosure mechanism was greatly improved, and there were crackdowns on insider trading and price manipulations. But many still doubt whether the withdrawal of more poor-performing listed companies and securities houses, the establishment of an investor protection system and the opening of more investment channels can revitalize the market, due to the many other components affecting its movement now. |
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