North China's city of Tianjin will receive 2.5 million euros in
aid from the German development aid agency GTZ to boost the
building of the port city's property rights trading market.
The three-year project, run by the Tianjin Property Rights
Exchange (TPRE) as part of a technical cooperation agreement signed
in 1982 between China and Germany, is the first Chinese project in
the property rights sector to receive foreign funds.
The Tianjin municipal government and the North Property Rights
Common Market (NPRCM), of which the TPRE is a member, will also
provide 25 million yuan (US$3.21 million) for the project.
The project aims to improve Tianjin's property rights trading
market in preparation for the establishment of an over-the-counter
market in the port city, said TPRE director Gao Luan.
Analysts said Tianjin's property rights market and capital
market will learn from the German experience under the Sino-German
cooperation.
Tangible assets, management rights, intellectual property rights
and shares of unlisted firms are usually traded in a property
rights market.
In another move towards making itself a financial center,
Tianjin applied to the State Council, or China's cabinet, to
establish an over the counter market rather than a third stock
exchange for the Chinese mainland.
In an over the counter market, securities are traded by dealers
who negotiate directly with one another over computer networks,
rather than on a centralized exchange. In general, shares are
traded over-the-counter because the company is not big enough to
meet the requirements to be listed on an exchange.
Tianjin Mayor Dai Xianglong said earlier this month that the
city had three models to choose from for the over the counter
market, including one that is based on the TPRE and NPRCM, one that
is independent of the two markets and one that includes a share
trading system for unlisted firms.
The NPRCM, China's largest alliance of property rights bourses,
includes 63 bourses from 19 cities, provinces and autonomous
regions. It turned over 150 billion yuan in 2006.
The project will also boost the restructuring of China's
state-owned enterprises and persuade Chinese firms to broaden their
fund raising channels by listing on the Frankfurt stock
exchange.
(Xinhua News Agency March 22, 2007)