China picks Tianjin as site for 3rd bourse

BEIJING - CHINA plans to set up the country's third stock exchange in the booming northern city of Tianjin within the year but the project still needs Cabinet approval.

The over-the-counter bourse would handle mainly equity transactions of unlisted public companies, the China Daily reported on Saturday, quoting Mr Pi Qiansheng, the director of the administrative committee of the Binhai New Area.

China has been trying to transform Binhai, centred on the port city of Tianjin, into a new economic backbone to fuel growth in the north of the country, and the area has become a designated zone for experimenting with reforms.

'It's a very important attempt to diversify property rights and capital,' Mr Pi said of the planned bourse.

The exchange is meant to be supplementary to China's current capital market, and give more attention to companies that focus on scientific innovation, the report said.

Beijing gave the approval for Shanghai and Shenzhen to build the country's first two stock exchanges in 1990, and there are now more than 1,400 listed companies on the two bourses.

A Tianjin official said last year he hoped that an exchange in the city could be like Nasdaq in the United States, focused on technology-related companies.

Separately, Mr Zhou Xiaochuan, the governor of China's central bank, which oversees the country's US$1.07 trillion (S$1.63 trillion) in foreign exchange reserves, confirmed that a former vice-finance minister will be named to manage part of the world's largest currency holdings.

Mr Lou Jiwei is 'engaged in doing preparatory work on the agency', Mr Zhou said yesterday.

China plans to set up an agency to help manage its currency reserves, modelling the agency on Singapore's investment company, Temasek Holdings.

REUTERS, BLOOMBERG NEWS