CHINA is to issue 5.5 billion new shares for mainlanders this year even as it looks into the setting up of several more exchanges throughout the country to beat existing geographical and communications limitations. The proposed new shares, about 10 per cent more than the A shares issued last year, were part of a continuing move to enlarge the country's stock markets, said China Securities Regulatory Commission chairman Liu Hongru. Speaking in London, Mr Liu said some enterprises chosen to list A shares would also be issuing overseas shares as well, and Hong Kong would continue to be an important venue for overseas listings. He added that: A few more exchanges might be set up to overcome the limitations of the trading capacity of the Shanghai and Shenzhen stock exchanges. A study would be undertaken of the liquidity of state-owned shares in listed companies. The transparency of listed companies' operations would be increased through fuller disclosure of market information. Focusing on ''The Hong Kong stock market in a China dimension'' in his talk to the London broking community on Tuesday, Mr Liu suggested that the two existing exchanges would be hard put to cope with the country's fast-growing securities business. ''With the number of shares issued by enterprises being increased and those of listed companies growing steadily each year, the trading capacity of the Shanghai Securities Exchange and the Shenzhen Stock Exchange have limitations. ''On the basis of unifying the securities listing system and perfecting the listing rules, we may set up a few more exchanges,'' he said. Such a move would take into account the differing characteristics of the regions and would overcome problems arising from the country's vastness and lack of communications. The exchanges could also compete to raise the market efficiency under the unified rules. Mr Liu said the country's securities authorities would also need to address the liquidity of state-owned shares, one of the three types of A shares issued. The other two types are shares for legal persons and for individuals, with only the latter tradedfreely. State-owned shares are not allowed to be traded and ''this makes it difficult for stock markets to exercise their function of adjusting state-owned assets structurally''. Mr Liu said: ''This problem must be gradually solved because it has a bearing on the property rights system of state-owned assets and the business administration system.'' He added that enterprises seeking listings tended to focus initially on fund-raising and neglect information disclosure. But as investors on the mainland became more mature, they were demanding more transparency. ''We should enhance the transparency of the market by ensuring the full disclosure of information. ''When selecting the enterprises which are to make public offers, we shall be more strict,'' he said. Reviewing the past year, he said the country last year raised US$1.2 billion from the issue of yuan-denominated B shares for foreigners. So far, 40 B shares had been issued and listed, of which 21 were traded on the Shanghai exchange and 19 on the Shenzhen exchange. There were 178 companies listed on the two exchanges by the end of last year, three times the figure for 1992. Their total market capitalisation was 480 billion yuan (about HK$425 billion), with Shanghai accounting for 220 billion yuan and Shenzhen 260 billion yuan. Total market turnover was 360 billion yuan, with Shanghai chalking up 240 billion and Shenzhen 120 billion.