China's 10-year old stock market has become a hot topic of discussion
in National People's Congress (NPC) and Chinese People's Political
Consultative Conference (CPPCC) sessions.
some irregularities on the stock market," said Xiao Zhuoji,
a top economist with Peking University, referring to a number
of price manipulations exposed since late last year.
"But as the
market was established in a transitional economy it cannot
be freed entirely from these problems," Xiao, also a
CPPCC member, said during the Fourth Session of the Ninth
National Committee of the CPPCC, which concluded yesterday.
The economist said
the market on the whole was sound and contributed enormously
to the economy.
Until 2000, the
stock market had contributed 122 billion yuan (US$14.7 billion)
in stamp tax to State revenue. In 2000, the stamp tax accounted
for 12 per cent of total tax revenue.
had helped improve the management of listed firms, Xiao said.
Wu Jinglian, a
renowned economist with the Development Research Centre under
the State Council, said there were still problems to deal
in the market, if not stemmed, may lead to the collapse of
the market," he said during the CPPCC sessions.
Wu has repeatedly
warned that over-speculation in the market is dangerous and
has suggested strict regulation measures be taken to ensure
order in the stock market.
In January, when
he was in Shanghai attending a meeting, he attacked the market
manipulation and price rigging.
He said the interests
of small investors, who are often the victims of manipulation,
need to be protected.
market, with so much speculation, is like a casino,"
"In the short
term, small investors may profit by buying and selling shares
in line with the market trend created by manipulators. But
in the long term, they will lose," he said.
His attack sparked
a heated debate among top economists, especially after the
market slumped in January after Wu's remarks were reported.
In the first trading
week after the Lunar New Year, the stock indices decreased
by about 8 per cent.
Led by Li Yining,
a heavy-weight economist with Peking University, five stock
experts, including Xiao, rebutted Wu's remarks.
They said it was
common for a new market to experience problems, although regulation
was still necessary.
should be solved according to law, but they should not blur
our eyes to the achievements the stock market has scored in
the past years," Li Yining said.
should not obstruct the development of the market, he said.
The debate has
continued during the current NPC and CPPCC sessions and many
NPC deputies and CPPCC members expressed their wish to adopt
stringent measures to eliminate speculation from the market.
some shares are driven up incredibly high by manipulators
while shares of some good companies are ignored," said
Li Songling, a NPC deputy from Hunan University.
must be regulated to ensure its healthy development,"
His call is in
line with the central government's view.
"We need to
standardize and improve the securities market and safeguard
the securities market supervision," Premier Zhu Rongji
said when delivering the report on the outline of the 10th
Five-Year Plan (2001-05) to NPC deputies last Monday.
should be the central theme," he said.
Since July 1, 1999
when the Securities Law was enacted, the China Securities
Regulatory Commission, the market regulator, investigated
236 cases of alleged market manipulation. Punishments was
delivered to 142 people and 88 institutions with fines totalling
466 million yuan (US$56 million).
(China Daily 03/13/2001)