China is looking to set up a new kind of Stock Exchange, with a focus on small to medium sized enterprises (SMEs).
The announcement was made by China's President, Xi Jinping, in a speech last Thursday.
- China plans to introduce a new Stock Exchange in Beijing, according to China's president, Xi Jinping.
- The new Stock Exchange will focus on "innovative SMEs", which includes startup companies.
- China presently has 2 other stock exchanges — one in Shenzhen and another in Shanghai — both catering to larger firms.
Why It Matters
- The establishment of Beijing's new stock exchange will not only provide additional fundraising avenues to smaller Chinese companies, but also provide a liquidity platform for investors.
- This move also comes as more Chinese companies seek to go public in the United States such as Alibaba, JD.com, among others.
- China is also introducing new rules to prevent local firms with large amounts of consumer data from going public outside of the country.