China to open a new stock exchange in Beijing

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China wishes to set up a third stock exchange to serve small and medium-sized businesses and announced plans regarding it.

While giving a speech at the International Fair for Trade in Services – President Xi Jinping said the new share market will be in the capital Beijing.

Currently, the country has two major markets – one in the Shanghai financial hub and the other in the southern city of Shenzhen.

This decision was made to ease the Chinese companies that have been under increasingly close scrutiny, by both Beijing and Washington.

Although President Xi did not give further information on the plan, the China Securities Regulatory Commission (CSRC) published a statement shortly after his speech that said its leadership was “excited” at the prospect.

“Small and medium-sized enterprises can do great things,” the CSRC added.

The regulator said that the registration system for the exchange would be similar to Shanghai’s STAR market, which is seen as China’s answer to the technology-heavy Nasdaq platform in the US.

In recent months, Chinese authorities have announced a sequence of trials that have had a key influence on large parts of the country’s private sector.

Along with the new measures imposed on companies, Chinese authorities have intensified their oversight of firms with share listings in the US.

The previous week, Chinese electric car maker BYD’s had to suspend a plan to sell shares in its computer chip-making unit, making it the latest share offering to be hit by Beijing’s crackdown on businesses.

Earlier this month, the Chinese government signalled that this crackdown would continue as it unveiled a five-year plan outlining tighter regulation of much of its economy.

Meanwhile, in America, the Wall Street regulator, the Securities and Exchange Commission (SEC) said it will now require extra information from Chinese companies aiming to sell shares in the US.

 

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