Reading the “zhi chu” Tea Leaves; Promulgation of Stock Issuance and Listing Rules?
August 12th, 2003PRC leaders constantly “zhi chu.” The lead stories on nightly CCTV broadcasts routinely feature a top leader “pointing out” (指出, zhi chu) this and that. Stories in the print media also regularly have some official pointing out, emphasizing or “revealing” a litany of platitudes.
In fact, the sarcastic piece that got the Beijing Xin Bao newspaper permanently shut down listed just this as one of the “7 disgusting things” about the PRC. It lamented the way top leaders “zhi chu” obvious things such as, “when you are hungry, you should eat,” or “when it is cold you ought to dress warmly.”
Lately Shang Fulin, the head of the CSRC, has been busy “zhi chu-ing.” Often he points out that reform (gai ge) and cleaning up (gui fan) of the PRC securities markets must be kept in pace with development (fa zhan).
I think these comments, though vapid on one level, do have some hermeneutic purpose. They are readable tea leaves. I take them to express that a different political or policy “line” exists under Shang than under Zhou Xiaochuan, the former CSRC chairman. Zhou sometimes expressed the idea that it is not the job of regulators to assure that investors profit. Rather regulators are simply to enforce the laws. Shang, I think, is saying that law enforcement has to be moderated so as not to disrupt the development of the markets or unduly affect existing share prices.
Shang recently has offered classic “zhi chu” platitudes concerning the in-progress revision of the Securities Law and initial promulgation of a Securities Investment Funds Law.
Interestingly, he also mentioned promulgation of Stock Issuance and Listing Rules. I have seen many prior references to the revision of the Securities Law and promulgation, finally, of a Funds Law, but this is the first time I’ve seen something about promulgating Stock Issuance and Listing Rules.
I am not sure what the significance of this might be. The Co. Law already lays out many objective criteria for issuing securities (for IPOs, three years of operations and continuous profits, projected profits exceeding bank interest rates, certain scale requirements for issuers). So there is already law on the criteria for issuing; I don’t think they need more.
The last revision of the Co. Law empowered the CSRC to make special rules for high tech companies. But now that the “second board” is dead, or at least clearly on indefinite hold, I don’t think any new rules are needed for that kind of issuing and listing.
They could just want to codify at a higher level some of the CSRC’s existing rulemaking, such as the instructions to the Stock Issuance Examination Committee. However, it is hard to see any compelling need to upgrade the status of existing regs (to State Council enactments?). There must be something new afoot. What?