Only five companies listed on China's stock market announced they have started shareholder reforms this week, far fewer than the average level during the early rounds of reforms which aim to float shares that were previously barred from trading.

Since April last year, an average of ten companies listed on the Shanghai and Shenzhen Stock Exchange would announce the kickoff of their shareholder reforms at the beginning of each week.

The reforms, also known as split share structure reform, are among measures the government has taken over the past year -- along with legislative reforms for listed firms and corporate governance reforms -- to revive the capital market and improve its financial security.

Split share structure refers to the existence of both tradable shares and non-tradable shares owned by the state.

To make shares tradable, listed companies have to offer additional shares or funds to private investors as compensation for potential losses in the value of their portfolios when the publicly-owned shares hit the market.

The market value of listed firms that have adopted the reform now represents more than 90 percent of the total of the two Chinese bourses.

Still some 180 companies listed on the mainland market have not started their reforms, most of which have serious problems such as huge losses or non-tradable equity that has been frozen by the courts or banks.

Figures show in the first half of this year, more than 100 of the 180 companies recorded losses, and the non-tradable shares of more than 130 companies were used as collateral and have now been frozen.

Chinese securities regulators have ordered all listed companies to complete share reform by the end of this year, encouraging those that are in difficulty to boost reform by inviting merger and acquisition.

(Xinhua News Agency September 18, 2006)