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The Shenzhen Stock Exchange has been preparing for the launch of the Nasdaq-like growth enterprise market (GEM) for 8 years and it is now the high time for its official debut, said Chen Dongzheng, general director of the Shenzhen bourse and member of the National Committee of the CPPCC, during an exclusive interview with Shanghai Securities News.
Chen pointed out startup companies run great venture risks, which shall be borne by entrepreneurs themselves and venture capitalists instead of by market investors. As great progress has been achieved in the country’s economy and capital market, the threshold for GEM access is much higher than 8 years ago. Through extensive surveys jointly conducted by the SZSE and the Ministry of Science and Technology, the status quo of small and medium enterprises in China has been greatly improved during the last 8 years, which in turn determines the fundamentals of the GEM.
Chen added, Chinese SMEs, esp. high-tech enterprises represent a rather powerful force with independent innovation capabilities. What matters most at the moment is how the capital market shall adapt to the rapid growth of these SMEs, as the development of a multi-tier capital market largely depends on the national economy. He further disclosed the country’s top stock regulator would soon issue an exposure draft on the GEM to solicit opinions from the general public.
As regards cooperation between Shenzhen and HK’s capital markets, Chen expressed there lies great and wide-ranging cooperation potential for both sides. However, as China’s capital account is not fully accessible, it still takes time and joint efforts to fulfill free exchange of renminbi and further opening up of the country’s capital account, which can substantially facilitate the cooperation between the two sides.
