Xi’s radical stock reforms shield China firms From U.S. | The Edge Markets

Xi’s radical stock reforms shield China firms From U.S. | The Edge Markets


(July 22): A plan by President Xi Jinping hatched in late 2018 to liberalize China’s constrained stock market and prevent home-grown tech firms from flocking to New York is turning out to be a prescient move.

The reforms took shape in the form of a new, relatively small venue in Shanghai, called the Star board, which started trading exactly a year ago. The goal was mild in scale compared with other major stock markets, but radical by China’s standards: Minimize red tape and relax tight controls on what kind of companies could list, and how much their shares could move. More than 130 companies have raised a combined US$30 billion from the board over the 12 months.

While the board went quiet after an explosive first few weeks, high-profile candidates including Jack Ma’s Ant Group and China’s top chipmaker are putting it back in the spotlight. Officials have also said that the same relaxed rules would soon apply to the much larger ChiNext board in the southern city of Shenzhen, setting the stage for a shakeup of the entire US$9.3 trillion market.