A Chinese business newspaper has called for China to conduct "urgent structural reforms to revitalize its stock market," which has been on a downward trend for several years.

"Although China achieved marked economic growth over the past years, its stock market has declined," the China Business Times said Monday.

China's economy grew 9 percent in 2004, but the country's two stock exchanges in Shanghai and Shenzhen were listed as the world's two worst stock exchanges in terms of performance, the paper quoted Donald Straszheim, former chief economist of the United States Merril Lynch Capital Market, as saying.

"China needs to adopt measures to solve the problems existed in the internal trading on the stock market and strengthen the management and supervision of the listed companies to boost the confidence of investors," Straszheim said.

"Information and data concerning listed companies should be transparent, otherwise, neither Chinese nor overseas investors will be willing to buy stocks in China," he said.

An official survey of 45,000 people revealed that three-fourths of the respondents are more concerned about how to reform the stock market than how to deal with the problems of corruption and the increasing gap between the rich and poor.

"I won't buy stocks in either Shanghai or Shenzhen, because there are too many gambling factors," said Straszheim. He said he would suggest investors be very careful buying stocks, unless they have confidence in the data and information provided by the companies.

Investors are hoping to see an end to the split share structure resulting from the planned economy, seen by many leading Chinese securities experts as the markets' biggest problem.

The split share structure refers to the existence of a large volume of non-tradable shares owned by the state and owners of the listed companies. This means that only about one-third of the shares in domestically listed companies float on the market.

The structure puts public investors in a worse position than the actual controllers of the listed companies.

Source: Xinhua