China is trying to channel more money into medium-and small-sized (M&S) firms to broaden their financial bottleneck.
Policy-makers are eyeing this move as an important step to keep China's economy on a fast lane, but its prospect seems bumpy.
"An original way must be found to resolve M&S firms' difficulty in capital raising," Zhou Xiaochuan, chairman of the China Securities Regulatory Commission (CSRC), was quoted as saying by the Beijing-based Securities Times.
Zhou made the remarks at a symposium for promoting the newly-promulgated Law for Boosting M&S Firms' Development, which was held early this week in south China's Shenzhen, one of the first batch of cities to experiment the country's opening-up policy.
Given M&S enterprises' characteristics, the traditional method and mentality are not so favorable for satisfying their need of capital, hence we should turn to certain ways innovative and compatible to China's reality to cope with it, Zhou said in the CSRC-sponsored newspaper.
But the chairman did not disclosed what he meant by "an original way", except insinuating something related to allowing M&S firms to get listed in the stock market.
Analysts think that Zhou might indicate sort of bolder measures to be taken to divert more money flow to M&S enterprises, mostly from non-State sectors.
As a matter of fact, tax cuts, more banks' loans and equitable slots in the stock markets have already been mentioned in the M&S-firms-boost law as the main methods to satisfy M&S firms' money demand.
But market reaction to it appears quite lukewarm.
The law is criticized as being more like a government guidelines than a detailed and workable regulation: full of general and haze lines but little operative directives.
Since it was first put forward in 1998, the draft of the law has traveled across more than 10 government departments, with each attaching bureaucratic scrutiny, Zhu Shaoping, an official of the Financial and Economic Commission of the National People's Congress, China's parliament, was quoted as saying by the Guangdong Hong Kong Information Daily, a business newspaper in south China's Guangdong Province.
Should it be more detailed, the law will have to wait for another five years before its publication, Zhu said.
As a product of compromise, the Law for Boosting M&S Firms' Development naturally has to leave many vague points to be further clarified.
However, the government will soon find that it has to grant the M&S enterprises, most of which are private businesses, equal opportunities.
The daily emaciating State-owned enterprises, looming deflation, dormant household consumption and ever-increasing number of unemployed workers all require the M&S firms stoke more energy into the economy.
During the first six months this year, investment by collective and private enterprises, the majority of which are M&S ones, surges 17.8 percent, 10.3 percentage points higher than the same period last year, according to the National Statistics Bureau of China.
The investment has contributed greatly to the glistering 7.8 percent growth of China's gross domestic product during the first half year, according to Zhang Liqun, an economist at the Development Research Center under the State Council, a government think tank.
But non-State businesses, mostly M&S firms, seemingly have yet to wait longer for an equal footing in gaining financial support, both from banks and bourses.
(People?s Daily July 24, 2002)
