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China's central government, the State Council, issued a circular recently aiming to enhance the quality of its listed companies.
"Listed companies are the cornerstone of the capital market and to improve their quality is to enhance the investment value of the capital market," the circular said.
"This is especially significant in making the capital market more attractive and full of life, optimizing resource deployment, and protecting investors, especially small and medium-sized investors, legal rights," it said.
In the past ten-plus years, Chinese listed companies grew stronger and have become the pivotal force in pushing forward company reform and industrial development.
"Affected by a certain mechanism and environment, a large number of listed companies do not have a good record in corporate governance, operational regulation and quality, which has seriously affected the investors' confidence and restrained the sound and stable growth of the capital market," the circular said.
"It has become urgent to improve the quality of listed companies by advancing reform and the opening up of the capital market," said the circular.
The circular urges local governments to shoulder the risk for listed companies located in the region, adding that securities regulators should step up supervision over listed companies and measures be taken to punish concerned staff in case of regulation violations.
(Xinhua News Agency November 3, 2005)
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