"We haven't heard anything about that yet," said a CSRC official, stressing a cautious attitude towards market rumors.

Unconfirmed reports said sales of massive State-held shares in listed companies would be resumed as early as April.

It was rumored that while details were still to be hammered out later, the new plan's principles had been decided and centered on having a far more market-depressing impact than its predecessor which was suspended last October.

Insiders said a decision on the plan and its implementation would be up to the State Council because of its significance to the economy and potential impact on the stock market.

While nobody could convincingly confirm or refute the reports, analysts mostly doubt the workability of the principles of the alleged new sale program.

And they said the timing was not right as they saw no end to the market slowdown by April.

Under the suspended scheme, listed companies were required to sell their State shares equivalent to 10 per cent of the proceeds from new share offerings and at the market price.

Investors disliked this and share prices nose-dived, forcing the authorities to call off the scheme designed to raise cash for a social security fund.

The rumors say the new program would feature a "higher price," a higher cut than 10 per cent and that untradeable shares held by institutions would follow suit.

"It was not workable to price the State shares above the market price, if that's what is meant by a 'higher price,' given the enormous magnitude of the sale," said Wang Yuanhong, senior researcher with the State Information Center.

"At least there should be complementary measures to offset the impact," said Yan Bin, an analyst with Beijing Securities.

Wang said the pace of the sale was of less significance, if the price was acceptable. Many favored a price equivalent to net assets per share.

(China Daily January 11, 2002)