It will join Shanghai and Shenzhen to help small and medium-sized hi-tech firms raise capital. In China, banks tend to favour large state-owned enterprises. The move is designed to reassure investors, worried about the government's crackdown on tech giants and its anti-sanctions law.
Beijing (AsiaNews) – China will have a third stock exchange. After Shanghai and Shenzhen, which opened 30 years ago, the capital will also have its own bourse.
Chinese President Xi Jinping made the announcement late yesterday in his opening speech at the China International Fair for Trade in Services.
The Chinese leader stressed that the new exchange will bolster the development of small and medium-sized hi-tech enterprises.
The Beijing Stock Exchange will focus on the over-the-counter (OTC) market, which already exists in the capital.
The value of listed companies in Beijing’s OTC market grew by 56.8 per cent to 129.5 billion yuan (US$ 20 billion) last year over the previous year, well below the 122.8 trillion yuan (US$ 19.5 trillion) in Shenzhen.
This should help small businesses which have suffered the most during the COVID-19 pandemic.
Their inability to get loans and funding from domestic financial institutions is a structural problem in China.
Chinese banks tend to favour large state-owned companies, as was the case during the worse months of the coronavirus emergency.
For a number of analysts, the Chinese president wants the innovative services sector to give a new impetus to the economic recovery.
Recently, economic growth slowed down because of latest COVID-19 lockdowns and massive floods in central China.
According to several observers, a new stock exchange centred on technology firms should also reassure investors, especially foreigners, worried about certain steps taken by the Chinese government.
In his latest anti-monopoly drive, President Xi went after the country’s hi-tech sector, which lost a trillion dollars in value.
Investors are also worried about China’s anti-sanctions law, Beijing’s response to punitive measures imposed by the US and its allies, which Beijing wants to extend to Hong Kong.
The recent closure of the US Chamber of Commerce in Chengdu (Sichuan), ordered by the provincial authorities for alleged regulatory problems, will not boost foreign confidence.