On The Overall Circulation Of Shares Of Chinese Listed-company

Authorized by People's Bank of China, two stock exchanges were established in Shanghai and Shenzhen, respectively in 1990 and in 1991. The stock market in China has been developing rapidly for more than ten years. However the defects derived from the initial design of the market have been revealed, which has already become the barrier for the development of the stock market in China. The State-owned shares as majority, and its disability to circulate have been criticized. Therefore the plan for the overall circulating of shares and the reduction of the state-owned shares has also been in dispute. Based on the research on the evolvement of company system, the author believes the overall circulation of shares is the essential requirement for the healthy operation of the business activities, and the previous system and regulations have gradually broke away from the realistic situation, and impeded the further growth of the economy. The existence and development of the law derives from the present society, therefore it needs to evolve and be improved constantly. Separation of the stockholder equity was an institutional innovation in that age, which needs to be perfected at present. We also should treat with the overall circulation and the reduction of state-owned shares in different ways. Since the overall circulation of shares is the only out way for the stock market in China, the specific plan should pay more attention to the interest conflicts which may be caused by the overall circulation. Conflicts between the stated-owned shareholders and other shareholders, floating share holders and non-floating share holders are the emphasis in the paper's research. In the analysis on the conflict between the stated-owned shareholders and other shareholders, special attention is paid to the nature and status of the stated-owned shareholders, and their influence in the overall circulation and reduction of state-owned shares. Based on the above, the paper underlines the legal requirement for the protection of floating share holders, and the necessity to improve the operation rules of the shareholders' meeting and ensure the sufficient participation of the floating share holders. The paper emphasizes on the interest balance of overall circulation of shares, and also involves the social efficiency and cost for the settlement of the overall circulation. The law must achieve not only justice but also efficiency. Therefore, during the settlement of problems about the listed-company and the stock market, systematically arrangement must be considered. In order to comprehend the overall circulation in a broader range, the paper makes further research on two aspects: the intermediate institution, such as investment bank; free market and inference of government, which is closely related to the problem. It is clear that the overall circulation of shares is a complicated systematical project, as far as the law, systematically plan which considers different parties' interests is definitely required.