Excitement and anticipation have mounted around the new ChiNext board, due to begin trading on Friday.
The new alternative board, modeled after the highly successful NASDAQ market, will debut with 28 private companies. The focus on private small- and medium-sized enterprises is a change from the state owned enterprises and heavy industry-based Shanghai boards.
A NASDAQ-like board has been in the works since 1998 but was postponed several times due to fluctuations and scandals that frequently plagued the trading market.
According to a Global Times editorial, regulators must guard against corruption and make sure that ChiNext distinguishes itself from the main boards. Transparency is needed to "keep the bad guys out" of the market. If not, the article warns, the new ChiNext board will be just like its predecessors, which the paper describes as a "casino for companies and investors" and a "dead end."
Comparisons between the ChiNext and the NASDAQ may also be premature, according to the article, considering that scandals and losses destroyed Germany's alternative board, the New Market, in just five years.
However, the editorial also praises the new board for picking successful private business and for offering hope to entrepreneurs and honest investors. The success of the market, it contends, depends on the quality of the companies, strong regulations against fraud and the number of reasonable investors. |
