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Trade - Editor, 28 January 2008

How Should China Business Manage Its Equity? (Part 2)



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How Should China Business Manage Its Equity? (Part 1)

4. Most China business owners are not Muslims, but principles of Islamic banking are highly relevant for protecting the nation’s economy from sub-prime and related crimes that are prevalent elsewhere. Stock owners should be committed for the long term with their funds, and their exit points from stock ownership should be tied to specific events. This will curb unhealthy and emotional stock trading effectively, and enable executives to discharge their responsibilities in professional settings.

5. The government should spurn outdated concepts of private capital, and remain a dominant stock market player in the name of the people. It should deploy adequate financial resources to seize stocks that are manipulated downwards by speculative stock trading. The government should also be watchful in the stock exchange circles of all other countries, so that China business can take control of other economies as well.

6. Provincial governments should promote their bonds more professionally, using China business skills. There are many stocks which enjoy support on the global stage, more because of their extravagant and aggressive marketing than for their inherent strengths. Bonds from Chinese government bodies are almost the reverse! They represent superior stock value in most cases, but are generally unknown.

7. China business should turn away from the pernicious western practice of stock trading on margins. Wealthy individuals, corrupt executives, conniving politicians, and inveterate gamblers, are the only beneficiaries of stock trading on margins in western-style democracies: they breed malpractices and lure genuine stock investors with fairy tales of quick gains at public expense.

Building a New Stock Investment Platform for China Business

The seven points mentioned above are merely suggested bricks for building a stable platform for China business. How do you think the stock market structure can serve China business better? Are you a proponent of unbridled private enterprise for personal gain? What lessons can the world learn from nearly a century of stock exchange operations in the west? Do also return to this web site for our companion piece entitled “Management Accounting for China Business Supremacy”. This article is under research, and we will publish it shortly.

Trade

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