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Information-technology enterprises should devise effective ways to raise capital to enhance their competitiveness, officials and analysts said.
Gou Zhongwen, vice-minister of the information-technology industry, said: "Domestic IT enterprises should work out feasible strategies on the capital markets and combine industry and capital to build more IT enterprises that have global prestige."
IT enterprises should work in conjunction with the capital markets, which will not only help enterprises raise the funds they need but also help accelerate the process of corporate reform, he said.
Figures from the China Securities Regulatory Commission indicate that there are 123 listed IT-related companies on the Shanghai and Shenzhen bourses, accounting for 10 percent of the listed firms.
They are mainly involved in the areas of colour TV sets, personal computers and telecommunications.
Analysts said IT companies should pay attention to three major issues when entering the capital markets.
Zhou Qinye, deputy general manager of the Shanghai Stock Exchange, said that, first of all, IT companies should work to improve their competitiveness.
Currently, most listed IT firms focus merely on manufacturing IT products. They should also emphasize the development of core technologies as well as doing more research and development, he said.
"Second, capital raised from the capital markets should be put into the enterprises' key businesses to sharpen their competitive edge," he warned.
Third, IT enterprises should take advantage of going public to conduct effective corporate reform, he added.
Analysts also called for the improvement and reform of the country's capital-raising system for IT firms. There should be greater support for small and medium-sized enterprises, they said.
Small and medium-sized enterprises cannot currently get much support from the capital markets as the requirements for public fund-raising are way too high, according to Li Wanshou, vice-president of the Shenzhen Creative Investment Group Co Ltd.
He said a second board should be set up. "That would get our investment activities in full swing," he said.
Industry insiders said that, although China's investment and capital-raising system is still far from satisfactory, the fast development of the Chinese IT industry has still caught the eye of investors at home and abroad.
In the case of the country's telecommunications sector, figures from the Ministry of the Information Industry show that the number of fixed-line telephone subscribers increased by an average of 3.73 million in the first three months of the year, while the number of mobile-phone subscribers rose by 5.11 million a month on average.
Ministry figures also show that, by the end of March, China had registered a total of 447 million telephone users, including both fixed-line and mobile phones.
According to the CCID (China Center for Information Industry Development) Consulting Co Ltd, a research house under the ministry, investment in the IT industry will go to many fields, such as the development of embedded software and the broadband Internet.
(China Daily May 30, 2003)
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