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China capital market structure $bn |
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The Chinese securities regulator, the CSRC, has again announced proposals designed to restructure the domestic stock markets in Shanghai and Shenzhen. This will be the CSRC’s third attempt to effect change, with the two previous attempts never getting out of the starting blocks. The main issue at hand concerns the enormous overhang on the market from state-controlled interests in most of the nearly 1,400 locally listed companies. These interests, deemed ‘legal person’ shares, represent approximately two-thirds of the total value of the stock markets, some $417 billion compared with $227 billion of shares that are freely tradable (see chart at right).
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