A Bourse is a Bourse

Not that you would ever convince participants at Reddit r/China otherwise, but the thesis that regulatory crackdowns are intended to increase competition and stability, rather than destroy Wall Street, has a new corollary. Well, new-ish. The erstwhile "new third board", a rather underwhelming, currently dormant stock listing platform, will be resurrected to serve small and medium enterprises.

The announcement to overhaul the New Third Board arrives in tandem with a State Council pledge of RMB300b to help the same small and medium businesses. The stated mandate is to encourage innovation and build a more broadly prosperous society. Even the more creative at Reddit would be hard put to spin this all as a ploy to consolidate party power by terrorizing successful tech giants.

"We'll see how this plays out," says Edward Lehman. "After all, the original New Third Board was largely a failure, plagued by insider trading and lack of liquidity. However, given the government oversight, including a negative list to set the groundwork for international participation, it's not idealistic to expect that this could eventually be a robust source of capital formation for China's SMEs."