Renmin University of China School of Finance and Securities Research Report on China's Capital Market. 2006: China's Capital Market after the Equity Split-Placement Reform

Author: Wu Xiaoqiu
Publisher:
Publish Date: 2006-04-01
Features: The split share structure is the most serious institutional flaw in China's capital market. It undermines the common interests of all shareholders in listed companies, distorts the integration function of existing resources in the capital market, and deprives China's capital market of its inherent capacity for sustainable development. The split share structure has served as the institutional platform supporting the operation of China's capital market over the past 15 years. When this platform is replaced by a fully liquid market, what degree of transformation will occur in China's capital market? This is indeed a question worth studying. This research report believes that after the reform of the split share structure, China's capital market will undergo comprehensive and profound changes in multiple aspects, including the regulatory system, market functions, shareholder behavior, financing method choices, corporate governance, market efficiency, and investment philosophy. China's capital market will transition from a "money pool" function to an "asset pool" function, the asset pricing system will experience significant structural divergence, and China's capital market will enter a new phase of development.