China has issued revised rules for removing money-losing companies from the stock market but even these might be seen as too harsh for investors.
The rules, which call for 'immediate suspension' after three years of losses but offer a reprieve of up to a year, might need to be supplemented with special trading on an over-the-counter market, said one stock-market specialist.
Liu Jipeng has called for the creation of a market to allow some form of trading while the shares cannot be traded on the main board, according to the China Youth Daily.
The newspaper yesterday quoted Mr Liu as saying establishing a delisting mechanism and the first delisting were still a long way away.
He added that the creation of such a market would protect the interests of shareholders.
China has many listed companies that are losing money, and some have already met the delisting requirements of three years of losses.
However, opponents of delisting have insisted that no action should be taken until there are concrete procedures for such a move.
More importantly, Beijing fears that the first delisting will deal a severe blow to market confidence.
Special treatment shares - companies with two years of losses - came under pressure again yesterday.
Particular transfer shares were not traded yesterday. They trade only on Friday.
Beijing has backed away from delisting troubled retailer Zhengzhou Baiwen, but uncertainties over a rescue plan for the company remain. San Lian Group, which came to Zhengzhou Baiwen's rescue, issued a statement at the weekend saying the plan could fail if it did not get support from market regulators.
Anthony Neoh, adviser to the China Securities Regulatory Commission, the stock market watchdog, suggested recently that a separate market for 'suspended' shares was possible, though he gave no indication of the depth of consideration this was being given in Beijing.
The delisting rules published at the weekend called for a suspension of trading in shares of any company after three successive years of losses.
Companies would have 45 days to request an extension of the time under suspension, however, and that period could last up to one year.
The special trading would be conducted during that period and would be aimed at cushioning the impact of a delisting.
'This is probably to give shareholders time to adjust,' said Pan Yingli, an economics professor at East China Normal University.
'Many small shareholders have little or no idea of the risk involved in share trading. This type of mechanism is probably in line with national conditions.'