The China Securities Regulatory Commission (CSRC) has named
the upgrading of the quality of listed companies as its top
pursuit over the next five years, according to CSRC Chairman
Zhou Xiaochuan yesterday.
The regulatory
authorities must strive to further improve the accounting
standards of these companies, Zhou said at the China Development
Forum 2001 which kicked off yesterday in Beijing.
"The quality
of listed companies is the basis for the further development
and reform of China's securities industry," he said.
"At present, the priority for listed companies is to
set up better corporate governance systems."
But China's accounting
standard still does not align with the internationally accepted
one, which will hinder the sector's further development.
"One problem
with listed companies is that some of them provide fake accounts
and information to fool investors."
Foreign investors
who are interested in Chinese stocks want Chinese companies
to use international accounting standards and Chinese companies
which want to list abroad are required to use international
standards, he said.
"We must upgrade
our accounting system to adapt it to the international standard."
China's domestic
accounting firms, however, are still weak compared with their
foreign big-name counterparts, he said.
"I think the
accounting sector should introduce international co-operation
and competition."
He said improvement
of the quality of listed companies is vital for the protection
of China's small and medium-sized investors.
Over the next five
years, the CSRC will enforce the supervision of the market
and firmly crack down on illegal behavior including insider
trading and market manipulation, he said.
More securities
rules, regulations and laws will be promulgated to cement
the legal framework and more advanced technologies will be
adopted to facilitate this supervision.
Zhou also talked
about the development of issuance of corporate bonds. To stimulate
the issuance of corporate bonds, the accounting standards
must be improved and the credit-rating market should be cultivated.
China still has
no credit-rating companies that enjoy a long history or international
fame and can thus be trusted by investors, he said.
(China Daily 02/16/2001)
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