For the first time, four Chinese firms have begun selling their former un-traded government owned stock. It's considered a turning point in China's sluggish stock market to unload US$300 billion worth of state shares that have dragged down markets for years.

The four mid-sized listed firms represent a mix of industry, from China's third-largest personal computer maker to private firms.

The stock saw a fall of about three per cent Monday. Stock analyst Liu Jingde says the drop shows investors are still cautious about the reform.

"The major reason is that investors' confidence hasn't recovered yet. Meanwhile, the market will be under great pressure if a massive amount of stock becomes tradable."

Stocks plunged 30 percent the last time regulators tried a similiar strategy in 2001. Investors worried the massive sale would flood the market.

Most Chinese companies have listed only a sliver of their total shares, with their state-owned parents and government-linked institutions owning majorities.

China unveiled the plan ahead of the week-long Labor Day break. The reform gives shareholders a say in how and when listed firms unload stock.

It also proposed steps to prevent markets from crashing.

(CRI May 10, 2005)