'Enterprises can choose which assets and equities exchanges to use for transactions but they should release relevant financial information about their own status and the assets to be sold properly on the exchange platform,' the Xinhua News Service reported.

'This is the first time Sasac has stipulated in an official document that equity transactions have to take place through exchanges,' said Zheng Ziqiang, assistant to the president of the Beijing Zhongguancun Technology and Equity Exchange.

While this policy has been discussed informally, this is the first time it has been enacted publicly, having taken effect at the beginning of this month.

In other comments, Mr Li hinted that the pace of selling shares to the public and listing these SOEs would proceed gradually to avoid roiling investors concerned about the government dumping shares on the market. 'We will wait for a while, until the shareholders calm down. This will avoid unnecessary fluctuations of the stock market and be conducive to the benefits of all parties concerned,' Mr Li was quoted as saying.

Originally intended as a back-door channel through which to raise money for technology start-ups or property deals, equity exchanges are being increasingly promoted as an entirely new financial transaction system for a major part of the mainland economy. They are also doing a secondary duty, selling non-performing loans held by China's four main asset management companies.

The exchanges act as clearing houses for data on state assets, loans and other companies that have not gone public. Interested buyers, including foreign institutions, review the assets and then set up meetings through the exchange.

Last year, the Joint Northern Equity Exchange, which represents 112 equity exchanges in northern China, said it had facilitated transactions totalling 106.6 billion yuan.

Apart from approving the exchanges as a new trading vehicle, Mr Li said his commission planned to create supervisory agencies by the middle of the year to improve the regulation of SOE sales.

'Such deals should also get the approval of the ... employees of the enterprises, rather than be decided by a few leaders,' Xinhua reported.

'In the past, lack of transparency during the transaction of state-owned assets has brewed insider trading and corruption that led to heavy losses for the state and also hurt the interest of enterprise employees and minority investors.'

Analysts said the policies were part of a broader effort to prevent widespread profiteering by senior managers of state assets.