By Yuan Fang
China.org.cn staff reporter
Shenzhen hopes China's long-expected Nasdaq-like Growth Enterprise Market (GEM) will be launched in the city in the near future, Xu Zongheng, the special economic zone's mayor, said yesterday.
"There is broad national consensus that the launch of GEM is a necessity, and Shenzhen has been eagerly and even anxiously waiting for ten years," Xu told reporters on the sidelines of the annual National People's Congress (NPC) session.
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Xu Zongheng, mayor of Shenzhen, talks to reporters on Sunday on the sidelines of the annual NPC session. |
All preparatory work has been completed and the GEM market could be launched any time the central government gives the go ahead, Xu said.
Chinese stock authorities have been striving in the past three years to push forward the GEM, hoping to help capital-strapped small enterprises raise funds for survival.
But the launch has been delayed due to large market fluctuations, and differences among officials on how to set profit and revenue thresholds for share listings.
Under revised rules, candidates for the GEM are required to have been profitable for two consecutive years and have an income of at least 10 million yuan (US$1.5 million).
If a company fails on the two-year profit requirement, it must post revenue of at least 50 million yuan and a net profit of at least 5 million yuan in its latest fiscal year to qualify for listing.
The launch of GEM will give a major boost to Shenzhen and the whole country, Xu said.
"It will help develop a multi-layer capital market and provide an effective funding source for capital-thirsty small and medium-sized enterprises."
The launch of GEM will also enhance the quality and competitiveness of listed companies, according to Xu.
"After getting a listing on GEM, small and medium-sized enterprises, especially high-tech companies, will have to improve their management and operations under the surveillance of the market authorities and investors," he said.
The launch of GEM would also help develop the venture capital sector. Shenzhen is home to one third of the venture capital and venture capital institutions in China, Xu said.
(China.org.cn March 9, 2009)
