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Securities watchdog faces reform challenge [Copy link] 中文

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Post time 2016-1-19 10:20:13 |Display all floors
China Securities Regulatory Commission Chairman Xiao Gang addresses the Asian Financial Forum in Hong Kong in this January 19, 2015 file picture. [Photo/Agencies]The current stock market volatility will challenge the Chinese regulator's ability to respond and implement reform, analysts said after the country's securities chief acknowledged deep flaws in the system.
Xiao Gang, chairman of the China ...

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Post time 2016-1-19 10:20:14 |Display all floors
Hard wares are easy to copy as they are relatively standard everywhere. China has done an excellent job in that. However, software is entirely different as it must be relevant and adaptable to the reality it serves. Just copying everything from 'Wall Street' won't do for China, as the China market is different with diversely different players, information transparency, knowledge level, mentality and attitudes, and valuations etc. Without deep understanding and in depth research, software should not be lightly copied. For China, as I have suggested here many times, alternative routes to a healthy stock market should be explored, starting with bonds and preferred shares, especially the latter. As only truly healthy and profitable enterprises can afford to pay decent dividends long term, even with SOEs, preferred shares issues do assure quality standards, profitability and governance of issuing enterprises. For example, many SOEs, even with government ownership and guarantees, have not delivered profitability and governance. As for China's innovative and high tech start-ups, my suggestion is that they should be initially confined to institutional investors and private equity investors for fund raising or in foreign markets (like the USA or Hong Kong) where public investors are more experienced.

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