Inside China: Ups and downs

Author: | Published: 26 Sep 2016

China is considering reforming its volatile IPO market. But the 2015 market crash has made the nation more cautious

China's IPO regulatory approach has swayed between liberal and conservative extremes while bouncing along with the ups and downs of its secondary market. How and when can China establish a market-based regulatory system?

As of June 30 2016, there were 2,887 listed companies on the Shanghai and Shenzhen stock exchanges with a total capitalisation of RMB51.61 trillion ($77 billion). This gives China the world's second-largest stock exchange market behind only the US. Since 2000, the China Securities Regulatory Commission (CSRC) has commissioned the Shanghai Stock Exchange to further develop the main board and commissioned the Shenzhen Stock Exchange to develop the small and medium-sized enterprise board and the growth enterprise board (GEB).

From its beginning in 1990, China's IPO market has been constantly plagued by an extremely long backlog...