Cash-rich Wenzhou covets exchange

Convoluted listing procedures have prompted the city to submit a proposal for its own stock market

The southeastern city of Wenzhou, with private capital of 270 billion yuan but not a single listed private company, wants to set up a stock market to enable its people, flush with cash but short of things to spend it on, to buy shares.

A city government official said yesterday a submission calling for the establishment of a stock exchange had been handed to the central government during the National People's Congress, which closed at the weekend.

He said that the city, in Zhejiang province, had many companies which were suitable for a listing but had given up hope because of the long waiting time and lack of approvals. In addition, the city has dozens of smaller companies that do not meet the requirements to list on China's two main exchanges but would attract capital from city investors.

The city submitted the proposal after reading a document on capital markets issued by the State Council on January 31. While not specifically advocating local stock exchanges, it said that it was an important strategy to speeding the development of capital markets.

'This is good for accelerating the development of the private economy, for raising the proportion of direct financing, improving the structure of the financial market and preserving financial security,' the document said.

A China Securities Regulatory Commission (CSRC) spokesman declined to comment on Wenzhou's proposal.