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Shanghai vows to boost SOE reform
By Chang Tianle (China Daily)
Updated: 2004-03-26 08:39
Through a series of new measures, the Shanghai government is vowing to make
it easier for State-owned-enterprises (SOEs) to go public and instill good
governance and competitiveness in listed companies.
The government is also encouraging securities houses and fund management
companies to attract foreign strategic investors, and is welcoming foreign
securities institutions to the city.
These moves are Shanghai's response to the State Council's plans aimed at
boosting the development of China's capital market.
"Effectively improving the quality of listed companies is the foundation of
healthy development of the capital market," Jiao Yang, spokesperson for the
Shanghai government, told a news conference yesterday.
As China's economic hub, Shanghai aims to merge existing SOEs into
conglomerates and go public.
The government will encourage qualified large SOEs to float their shares as a
group through various means. It also encourages listed companies to participate
in the merger and acquisition of State-owned assets.
Also high on the agenda, according to Jiao, is to better regulate the legal
operation of listed firms, including improving corporate governance, enhancing
investor relations and emphasizing investor returns.
The government will also be engaged in setting up incentives for Shanghai
listed companies' management teams.
"As for non-performing companies, they have to retreat from the market," she
added.
Shanghai aims to be an international financial centre by 2020 and aims to
attract financial institutions both from home and abroad.
The municipal government says it will continue to provide a fair and friendly
environment for various types of funds and institutions, according to the
spokesperson.
"We will greatly support and boost business integration and innovation among
banking, futures, securities and insurance industries to form an interactive
market structure," she said.
"We hope to attract fund management companies, insurance fund management
companies and qualified foreign institutional investors to locate in Shanghai,"
Jiao added.
Overseas strategic investors are also encouraged to buy into local securities
houses and fund management companies.
Jiao said the Closer Economic Partnership Arrangement between Shanghai and
Hong Kong provides an excellent opportunity enabling the two cities to
development their capital markets.
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