A-share market should encourage investors to take long-term view

LIU SHIYU, chairman of China Securities Regulatory Commission, said recently that building China into "a strong capital market" is an important task for the commission in the pursuit of national rejuvenation. Beijing News commented on Wednesday:

It is noteworthy the head of the regulatory commission proposed the ambitious objective of making China a power in the international capital market.
China's A-share market is already the world's second-largest stock market, so the country already has the foundation and capacity to build a strong capital market.

A dynamic capital market provides not only powerful support to the development of the real economy but is also necessary a means for investors to enjoy the dividends of successfully supporting the real economy.

China's stock market has long attached importance to its role as a source of financing for the listed companies, but it has ignored its obligation of sharing out the fruits of success with investors. As a result, investors focus on making quick money by buying low and selling high than profiting from the growth of the companies over the long run.

If short-term speculative investing dominates a stock market, even if the market is a reliable source of financing for the listed companies, it is still far from being a powerful stock market.

The A-share market has always put the companies' interests before those of investors, which is like putting the cart before the horse.

The commission headed by Liu has a lot of work to do in institutional reforms to better protect the interests of investors. The market should not be a cash cow for the listed companies. The companies should create added value from the trust and financial inputs offered them by investors.