The Beijing city government's ambition to launch a new equities exchange has won its former mayor's blessing, but it surprised mainland stock market investors who are already concerned about tight market liquidity.
Some analysts see the plan backed by Vice-Premier Wang Qishan to set up a new over-the-counter (OTC) equities market in the city as the latest volley by Beijing to keep its leading role as the nation's financial centre against fierce rivalry from Shanghai.
Wang, 64, was Beijing's mayor from 2003 to 2007 and was a key player in Beijing's staging of the 2008 Olympic Games.
Shortly before the Games began, he was promoted to be one of the nation's four vice-premiers, responsible for economic and financial issues.
The new OTC plan theoretically could help some domestic small- and medium-sized enterprises (SMEs) obtain funding, but that effect will be limited because of the likely small market capitalisation of the new nationwide board as well as the potentially mixed response from investors, analysts say.
Wang, a former banker, was quoted by state media earlier this week as saying that the new OTC market is 'an important part of building up a multi-layer capital market' on the mainland.