(Yicai) Sept. 11 -- Shanghai’s local government last week approved the setup of Shanghai Exchange Group, with the aim of encouraging trading by more private companies, according to industry insiders.

Shanghai Exchange Group was established based on the Shanghai United Assets and Equity Exchange, they said.

The Shanghai United Assets and Equity Exchange already covers various categories, including trading platforms for public resources, financial assets, and intellectual property rights. Its trading platform for local state-owned enterprise property rights facilitated CNY67 billion (USD9.2 billion) of transactions last year, up 10.5 percent on the previous two-year average.

“Given the company name, the newly formed Shanghai Exchange Group should be a trading platform covering all elements of the market,” said Fu Xiao, former head of the social development team of the Yangtze River Delta Regional Cooperation Office.

“It has products not only for corporate property rights, but also technology, data, and carbon emissions, which is important for promoting optimal allocation and building a big unified market across the country,” Fu noted.

“Private enterprises are important entities in market trading,” an industry insider told Yicai, and “in the process of releasing the stock of state-owned assets, it is necessary to have private enterprises buy the assets to activate market vitality.” 

The cities of Shenzhen and Guangzhou have already set up exchange groups based on the integration of local public resource trading venues and property rights exchanges.

Inaugurated in November 2020 with a registered capital of CNY2.5 billion (USD342.7 million), Shenzhen Exchange Group is a comprehensive trading platform, bringing together the trading of non-standardized debt assets and resources.

Guangzhou Exchange Group, which was incorporated in December 2021, is a city-managed enterprise jointly formed by the Guangzhou Public Resources Trading Center and China Canton Exchange Group.

Editor: Tom Litting