Analysis On The Delisting System Of GEM In China

At the beginning of a new decade, China was facing two major transformations:first is from the planned economy to communist market economy; the other is from the traditional economy to acknowledgement economy. Whether China can smoothly complete these two transformations relates to the China’s overall competence in the world. In this mass transformation, China is not simply copy other countries’experiences nor to explore the path with closed doors. It’s a process of absorbing with critical thinking and combining with full analysis and consideration of China’s own situation. GEM is a part of this mass innovative process. How to operate GEM relates to the consistent development of China, the upgrade of China’s product structure, the future of China, and most importantly to whether China can solve the problems occurred during the transformation with scientific attitude.On October the30th, GEM formally went on public. This widely expected project bears numerous investors’expectations, China’s innovative enterprises’ development and even the future of China’s science, also the compliments by the public. But during the past years, we have seen unusual circumstances happened to it. Enterprises’weakened performance, worries of growth potential by the public, increase rate of income only accounts1%-5%higher than the non-financial companies on the main board, unusual excessive fund raising,267companies’ total funding reached1,874trillion, an excess of1,209trillion to the planned660trillion. Instead of investing in expanding company business, the major portion of the funding has been involved in real estate investments of bank deposit. The delay of the presenting of delisting system, direct delisting is still now on the "waiting list".There’s always gap between facts and hopes, all we can do is to find out the differences and try to bridge the gap, fix problems. Before GEM goes public, numbers of market regulators, theorists and professions have been overcome barriers by formulating series comparable consummate systems and regulations. But even the most developed systems would have dysfunctions when facing the complexness of the facts. Facing the above mentioned circumstances, we must examine the formulation of our systems and regulations; find out the cause of the issues, so we can make prescriptions that would solve the problems.In a consummate GEM system, besides easing the qualification standards, completing company regulations, restricting the publication of company information, it should also include a system of delisting. When there’s coming in and getting out, a smooth, healthy channel of fund raising would exist, and the power of a free market would unleash. The focus of this article is analysis on the delisting system of GEM in China, and will analyze from the following aspects:1. Preface:introduces the history background of GEM’s birth and its development, and studying the significance of the GEM system delisting. After drawing on the relevant aspects of the books, papers and reports, summary and generalization of them by standing on giants’shoulders in order to look further and deeper into the issue, adopting2outstanding methods when composing this article.2. A brief introduction of GEM market:introduces the concept of GEM, discussing the history of GEM of both domestic market and overseas market, point out its development has not been smooth, but it goes on with the flow and develops fast, summing up GEM’s3characteristics, high costs, high gains, high risks, the formulation of GEM’s systems has been based on this premises.3. Basic theories of the delisting system of GEM:briefly introduces the concept of the delisting of GEM, and discusses the accordance of the delisting of GEM from the economic and law point of view in detail, the former includes government intervention and the theory of financial risk control, the latter consists order and efficiency which is the two basics of law, analyzes the function of the delisting system of GEB, combining basic theory together with actually situation of GEM.4. Typical GEM delisting systems:introduces the typical GEM delisting systems of other countries and regions, including NASAQ, KOSDAQ and HKGEM.3markets have been well operated and developed, set us role models for the perfection of China’s formulation of delisting system for GEB, pointing out the revelation they have brought to China’s delisting system of GEM. 5. The existing delisting system of China’s GEM:introduces the delisting system of China’s GEM regarding delisting standards, delisting procedures and delisting channels, points out the lack of them.6. The perfection of Chinese delisting system of GEM:based on part5, presents personal views and advices from delisting standards, delisting procedures, and delisting channels, hoping to help completing the delisting system of GEM in China.