China to speed up creation of new board for technology start-ups at Shanghai Stock Exchange
- New board is widely expected to scrap profit requirements
- Markets regulator to also push forward trial reform of IPO system
The China Securities Regulatory Commission, the country’s top markets regulator, said in a statement late on Monday it would push for the rapid establishment of an equity board for start-ups, a project unveiled by Chinese President Xi Jinping to help technology companies raise capital.
The CSRC said one of its top tasks in the new year would be to make sure the Shanghai Stock Exchange sets up the new technology board as soon as possible. The new board, announced by Xi during the China International Import Expo, a major trade fair held in Shanghai last month, is being viewed as a move by Beijing to increase China’s attractiveness to the fast-growing number of technology start-ups, and potentially rivalling bourses in Hong Kong and New York.
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The commission also said it would push forward a trial reform of the initial public offering system, which will give the market more power to determine what companies qualify to go public.
The purpose of the programmes is to “better serve technology, innovation and high-quality economic development”, said the commission.
“The setting up of the new board is inevitable, but its success will hinge on whether there will be enough trading volume,” said Wei Wei, a trader at Huaxi Securities in Shanghai.
Its success will hinge on whether there will be enough trading volume
The new technology board is part of the latest efforts by China to increase its technology offering, after an ambitious plan to allow domestic investors to own shares in offshore listed Chinese technology giants such as Xiaomi, Baidu and JD.com failed amid a slumping market this year.