Research On The Establishment Of Growth Enterprise Market In China

Growth Enterprise Market (GEM) or second board market, relatively to the main board, is a platform to support small to medium-sized enterprises and unlisted high-tech companies. In May 2004, the Shenzhen bourse introduced the Small to Medium Enterprise Board (SME Board), but is identical to the Main Board in terms of IPO qualifications and cannot work as a real GEM. The establishment of the GEM is mainly a matter of practice. As an important multi-layer of the capital market, GEM does not only improve the establishment of a multi-layer capital market system, but also finance for the SMEs and high-tech companies and promote the development of the venture capital. The government takes establishing GEM as a major national policy. Therefore, the research on the establishment of the Growth Enterprise Market is of great theoretical and practical significance.Basing on the fundamental theory of GEM, the thesis gives a clear concept of the GEM, an overview of the characteristics of the GEM, a description of the GEM history, a theoretical analysis of the establishment of GEM; then uses comparative method to analysize the developments of 5 GEMs in real world, three of which perform satisfactorily while the others not; then sums up their experiences and lessons; recalls the exploration of establishing our own GEM and discusses the necessity and feasibility of GEM; lastly, based on the comparative analysis of the practice of the international GEM and the China national conditions, the writer believes that it is high time to establish our GEM and gives the most appropriate suggestions on market positioning, working pattern and systems designs(including market access system, market trading system, market regulatory system and market withdrawal system) at this stage of China's economic development and the actual situation.It is high time to establish our Growth Enterprise Market. As to the market positioning, although GEM and the main board serve different kind of enterprises, it should be an overlap between them; as to the working pattern, we can re-organize the Shenzhen Stock Exchange to be a GEM and divide it into 2 parts to serve different kind of enterprises; as to the market access system, we will boldly draw a lot of international experiences; as to the market trading system, we should follow the Order-driven System of the main board, and then gradually introduce a Market-maker System; In addition, as to the market regulatory system and market withdrawal system, a number of specific recommendations are given by the writer.