TIANJIN may defeat other competitors and secure a permit to run China's third stock exchange this year, according to China securities analysts. China Securities Regulatory Commission chairman Liu Hongru said in New York on January 14 that China was now studying the possibility of opening up additional stock exchanges in the northern part of the country. He said the commission was ''examining and studying'' how it could learn from the establishment of the two stock exchanges in the south and increase the number of stock exchanges in China. ''As the financial reform tops the country's policy agenda this year, I heard in Beijing last month that China was likely to open a third stock exchange this year,'' said Fang Zhenmin, lecturer in the department of economics and finance, at City Polytechnic. ''Tianjin as the financial centre in the north should be in the best position to win the bid,'' said Mr Fang. China's two stock exchanges are located in the southern part of the country. The Shanghai stock exchange was set up in late 1991 and Shenzhen in early 1991. Both have made such good contributions to local economic growth that many cities, such as Shenyang, Tianjin, Wuhan, Beijing and Hainan, want to follow suit. They have been pleading with Beijing to allow them to operate stock exchanges. But it has yet to give a clear indication that permission would be granted. International brokerage houses also claim that China should not have additional exchanges because the securities regulations are still immature. However, Mr Liu's comment appears to have put the government one step closer to setting up additional exchanges. He said that the commission was considering more exchanges because the present situation was inconvenient for the northern part of the country and not conducive to competition. He said: ''Of course we have to be steady in our pace,'' adding that the commission was aware it needed sound legislation and qualified personnel before it could open additional stock exchanges. ''With a rapid development of the securities industry, China does need additional exchanges in the north,'' said Hu Liyun, general manager of Tianjin Stock Exchange Centre. ''As far as I understand, some central authorities have focused serious attention on the issue. I hope a decision will be made this year,'' she added. Last year, 100 companies listed in the two stock exchanges were worth a total face value of five billion yuan (about HK$4.4 billion). This year, the total flotation size will rise to 5.5 billion yuan. Many Shanghai and Shenzhen investors lack interest in northern companies, so those firms have been under-performing the overall market. ''Enterprise reform is the focus this year. The best way to improve their corporate management is to float them on the stock market and let the public be the monitor. So in the coming years, there will be a lot of new listings and two stock markets will not be enough,'' said Mr Fang. He explained that Beijing, as the capital, was not well suited to running a stock exchange, while Shenyang was too far away from Shanghai and Shenzhen. Mr Fang said that the operation of additional exchanges would be similar to the existing markets.