Beijing Stock Exchange: China gets third stock exchange

The country’s third stock exchange opened in China’s capital this morning. State and party leader Xi Jinping had campaigned for the “Beijing Stock Exchange”.

China’s new stock exchange has been trading since 9:30 a.m. local time. A reporter from the state broadcaster CCTV reported live from the trading floor in Beijing. Small and medium-sized companies are listed on the Beijing Stock Exchange, or BSE for short. The Chinese capital is to become the number one trading center for shares in medium-sized technology and industrial companies.

“The orientation of the new stock exchange shows how China’s industry is to be set up in the future,” says Zhou Hao, an analyst at Commerzbank in Singapore and an expert on the economy in emerging countries. “In the future, so-called hidden champions are to be promoted in the Chinese economy, in other words, emerging new companies with a lot of innovative strength and state-of-the-art technologies.

Driven by communist government

The new stock exchange is quite explicitly not an initiative from the private sector, but wanted and promoted by the communist government. And with great speed: It was only at the beginning of September that state and party leader Xi Jinping announced that shares would now also be traded in Beijing.

The Chinese capital is now the third stock exchange in mainland China, after Shanghai and Shenzhen. In addition, there is the stock exchange in the Hong Kong Special Administrative Region, which, however, cannot be compared with those in mainland China. The traditional Hong Kong stock exchange has been an integral part of the international financial markets for decades. The exchanges in Shanghai and Shenzhen, on the other hand, are only relatively weakly networked with other countries. They are also still not particularly important for institutional investors.

Beijing stock exchange insignificant internationally for the time being

The new stock exchange in Beijing will also initially play a subordinate role internationally. But it is all the more important for China itself, says Ye Tan, economist and founder of a management consultancy in Shanghai. “The new stock exchange has massive potential. More than 1,000 companies are ready to be listed in Beijing.”

It started this morning on the new Chinese stock exchange with significantly fewer companies: initially around 70 companies are listed.