China's central bank says Tianjin bourse proposal 'positive'

ASIA - The People's Bank of China views Tianjin's proposal to set up a stock exchange as "positive" for China's capital markets, giving certain enterprises more opportunity for direct financing, the official Xinhua news agency reported, citing the central bank's spokesman Li Chao. The reported Tianjin stock market proposal "is a positive signal for the development of China's capital markets," Li said. According to media reports, the Tianjin government has submitted a preliminary proposal to the State Council for a national stock exchange in the Binhai New Area development zone, an economic area set up to run trials on market-oriented regulations. Li noted however that he has no confirmation of the actual Tianjin proposal. The mainland has two stock exchanges in Shanghai and Shenzhen. Additionally, the Shenzhen Stock Exchange has set up an small and medium-sized enterprise SME board. Li noted that the threshold of the SME board in Shenzhen is still too high for some start-up enterprises, suggesting the Tianjin bourse may be the place for firms unable to qualify for Shenzhen.

The establishment of a bourse in Tianjin will to boost enterprises' direct financing channels, Li added.