China's Listed Companies Tradable Share Reform Discussion

Share-splitting is the most harmful institutional defect of China's capital market. It has destroyed the foundation of common benefits for all the shareholders of listed companies, distorted the function of integrating stock resources of capital market and resulted in the loss of internal motive force of continuous development of China's capital market. It has long been the institutional foundation violating the benefits of middle and small sized shareholders, i.e., those of tradable shares.The Share Splitting Reform (SSP), in nature, tries to restructure China's capital market institutionally. As a result, it is the most important and complicated structural reform so far, and becomes a landmark which has a significant influence on the development and systematic construction of China's capital market. Its historic significance could almost be as important as the initial establishment of the capital market in China in the early 1990s.Share-splitting has been the institutional platform underlaying the operation of China's capital market for the past 15 years. What changes China's capital market will go through when this platform no longer exists is indeed a problem worth studying. Under such circumstance, this thesis analyzed various issues related to share-splitting reform, and did a research on the influence it would impose on the development of China's capital market.First, it started from the birth and origin of share-splitting, analyzed the reasons of this institutional defect, which resulted from the interactions of system, mechanism and regulation defects. All those defects made China's stock market show different characteristics from other mature stock markets, and counteracted the normal functioning of stock market. Therefore, due to the existence of those defects, share-splitting reform becomes a must, both from a macro point of view of the institutional construction of stock market, and from a micro point of view of the improvement of the company's internal governance structure. This is the real motive...