China to set up Stock Exchange in Beijing for SMEs, President Xi Jinping says

On Thursday, Chinese President Xi Jinping announced that the country would set up a new stock exchange in Beijing. In a video address, President Xi mentioned the opening of the new exchange in capital Beijing, among other announcements, at the opening of China International Fair for Trade and Services. He said that the country’s support for small and medium enterprises (SMEs) would continue.

 

Mainland China already has two stock exchanges: in Shanghai, a financial hub and in Shenzhen, a southern city bordering Hong Kong.

 

Established in 1990, Shanghai Stock Exchange has large cap companies. It is the largest stock exchange company in China. It includes listings of

 

  • state owned enterprises
  • energy firms

 

The Shenzhen Stock Exchange was also established in 1990. It lists mainly

 

  • tech companies
  • small and medium companies.

 

The China Securities Regulatory Commission (CSRC) said the leadership was “excited” at the prospect of a new Stock Exchange in Beijing. It said that the new exchange would complement the existing exchanges in Shanghai and Shenzhen.

 

The proposed exchange would be the third in the country and might be an upgrade of the existing market structures and boards set up after 1990.

 

The President had said that they would deepen the reform of the New Third Board and would step up the Beijing stock exchange as the main platform to serve “innovation-oriented SMEs.” He did not mention a date for establishing the exchange in Beijing. A stock exchange in the capital would give it additional influence in the financial and business world.

 

This past year or more, the Chinese government had been cracking down on large companies and fining them for breaking the country’s laws and regulations. Most of the Chinese companies who listed in the U.S. have faced the government’s ire before and after listing. The U.S. government is also closely scrutinizing Chinese companies listed in the nation’s stock exchange.

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