Chinese official: small start-ups won't weigh on main board

China's upcoming growth enterprise board for small start-ups to raise funds will have limited impact on the main stock market, according to Yao Gang, new vice chairman of the China Securities Regulatory Commission (CSRC).

China's bourses saw continuous declines, partly due to fears of capital shortages after a series of tightening measures and huge refinancing. Yao explained that the market did not lack of capital but of better and more attractive investment products.

As regard to the 222 companies listed on the Shenzhen small and medium-sized enterprises (SMEs) board, the CSRC statistics showed the average market capitalization was only RMB 300 million. Yao said that the number would be even lower, ranging from RMB 100 million to RMB 200 million on the growth enterprise board. The board would be opened on the Shenzhen Stock Exchange in the first half of 2008, said Shang Fulin, the chairman of CSRC.

Lack of finance becomes one of the existing problems faced by China's 42 million small and medium-sized enterprises, among which over 95% are privately owned.