Beijing recently announced plans to establish a third major stock exchange on the Chinese mainland to serve ‘innovation-oriented’ small and medium-sized enterprises (SMEs).
President Xi Jinping said the new market will be in the capital city during a speech given to the International Fair for Trade in Services, as cited by BBC.
The announcement comes at a time when US-listed Chinese companies have come under scrutiny by investors.
According to China Daily, the goal of the new stock exchange is “to link multi-level capital markets and form the path of direct financing for SMEs,” among other aims.
In an opinion piece on China.org.cn, Tom Fowdy noted that the Beijing Stock Exchange can be viewed as a plan to “to further deepen the reform and upgrading of China's National Equities Exchange and Quotations (NEEQ).” The equity trading system for SMEs was launched in 2013.
It’s still unclear when the exchange will begin trading.
Barron reported that it is likely that individuals will be allowed to invest in the new exchange, citing quotes from Chinese media.
China had 167 million investors as of June 2020.
Click here to learn about Greater China’s three major stock exchanges.
[Cover image via Pixabay]