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Total disaster claims rebuffed
THE launch of the much-anticipated international board in Shanghai will benefit China and its economy, the president of the Shanghai Stock Exchange said yesterday, dismissing criticisms that it would be a total disaster.
His comments, and those by senior municipal government officials previously, were made as more worries arose that the Chinese mainland's A-share market, which has already slumped more than 15 percent so far this year, may collapse after the foreign board is launched.
But Zhang Yujun, the exchange's president, assured critics that having the international board to allow foreign firms to sell yuan-denominated bonds was based on conditions that it will be helpful to the world's second largest economy in building up its financial industry as well as to investors.
"We've given careful and serious thoughts to all kinds of concerns when we set up the system for the board," Zhang said at a forum.
Tu Guangshao, the city's vice mayor, told the forum that the board will help Shanghai build itself into a world financial hub by 2020 while Fang Xinghai, head of the city's financial services office, said in September the board will be a good financing platform for foreign firms.
But critics are not assured and warned that the launch of the new board will be a total disaster for the stock market.
"China's yuan is still not convertible in the world markets," said Xie Baisan, director of the Fudan University's research center for financial and capital markets. "The launch of the board will affect the yuan, which will impact the country's overall economy."
Liu Jipeng, director of Capital Research Center of China University of Political Science, agreed and said the launch of the board may damp investor confidence since all foreign firms will launch initial public offerings to raise funds, a move that is likely to hit the mainland stock markets.
His comments, and those by senior municipal government officials previously, were made as more worries arose that the Chinese mainland's A-share market, which has already slumped more than 15 percent so far this year, may collapse after the foreign board is launched.
But Zhang Yujun, the exchange's president, assured critics that having the international board to allow foreign firms to sell yuan-denominated bonds was based on conditions that it will be helpful to the world's second largest economy in building up its financial industry as well as to investors.
"We've given careful and serious thoughts to all kinds of concerns when we set up the system for the board," Zhang said at a forum.
Tu Guangshao, the city's vice mayor, told the forum that the board will help Shanghai build itself into a world financial hub by 2020 while Fang Xinghai, head of the city's financial services office, said in September the board will be a good financing platform for foreign firms.
But critics are not assured and warned that the launch of the new board will be a total disaster for the stock market.
"China's yuan is still not convertible in the world markets," said Xie Baisan, director of the Fudan University's research center for financial and capital markets. "The launch of the board will affect the yuan, which will impact the country's overall economy."
Liu Jipeng, director of Capital Research Center of China University of Political Science, agreed and said the launch of the board may damp investor confidence since all foreign firms will launch initial public offerings to raise funds, a move that is likely to hit the mainland stock markets.
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