The Impact of Share and Ownership Structure

Abstract

The enactment of national securities regulations and a company law together with the creation of a national industry regulator were without question necessary to promote the continued development of China’s equity capital markets. By the late 1990s, however, the costs of the political compromises and the historical burden of central planning had become clear. By avoiding at the birth of the equity markets 1 h politically sensitive issue of whether the ownership of state and legal person shares could be transferred and, if so, to whom, the government in the end has created a huge market overhang.