The yuan-denominted A-share market on the Chinese mainland will
become the world's third largest stock market - only after the
United States and Japan - in 10 years, said Hu Zuliu, general
manager of Goldman Sachs Group (Asia) Ltd.
Market value of Chinese stocks will reach five trillion US
dollars in 2016 and 10 trillion US dollars in 2020, equivalent to
70 percent of the country's gross domestic product (GDP), Hu told
the ongoing China Capital Market Forum in Beijing.
Compared with the most important stock markets in the world, the
A-share market is still small though it gained in size in 2006,
said Hu.
China's bullish stock market saw total market value hit a record
high of 10.25 trillion yuan (US$1.31 trillion) on Jan. 9, which was
equivalent to 50 percent of the country's GDP.
But the ratio of stock market value to GDP stands at 160 percent
in the United States and 124 percent in India.
Hu said China's capital market is hampered from expanding mainly
because the banking sector predominates in the financial system and
enterprises have long relied on bank loans in financing.
Chinese enterprises suffer from "complicated, overelaborate and
time consuming" formalities before being allowed to go public,
which have made direct financing impossible for many of them.
Hu suggested China simplify these formalities to help meet
enterprises' demand for funds and expand the capital market to
encourage more enterprises to go public.
(Xinhua News Agency January 15, 2007)