Shanghai to create a tech board for start-ups, unicorns to raise capital, upping the ante with Nasdaq and Hong Kong
- President Xi Jinping made the surprise announcement during his opening speech at the China International Import Expo in Shanghai
- Details remain scant, but the shares of Hong Kong Exchanges & Clearing Limited fell 3.2 per cent after Xi’s unexpected announcement
In a surprise announcement, China’s president ordered the establishment of a new equity bourse in Shanghai to help technology companies raise capital, upping the ante with Nasdaq and the newly reformed Hong Kong stock exchange as the market of choice for start-ups.
The unexpected announcement was made by Chinese President Xi Jinping during his opening speech at the China International Import Expo, which starts today in China’s financial hub.
Xi also instructed the commencement of a pilot programme whereby companies that want to raise capital through initial public offerings (IPOs) need only register themselves, thereby giving the China Securities Regulatory Commission (CSRC) a limited role in setting prices and in determining the timing of IPOs.
“The capital market will become more efficient, which will be helpful for value investing,” said Li Lifeng, a strategist at Sinolink Securities in Shanghai. “In the long run, the creation of the technology board on the Shanghai exchange will help build the city into China’s technological innovation centre.”
The move is the latest iteration of the Chinese government’s exercise in techno-nationalism, after a failed attempt to arm-twist Xiaomi and other large tech companies to issue Chinese Depositary Receipts in Shanghai.
