China is unveiling another stock market to complement the Shanghai and Hong Kong exchanges. The new market, the GEM, will be similar to the NASDAQ and will be comprised of biotech, clean tech, high-tech and other younger companies in the nascent stage of development.
GEM stands for “Growth Enterprises Market.” According to Matt Comyns, CEO of JLM Pacific Epoch, the GEM Exchange is evidence of China’s efforts to encourage domestic growth.
The GEM will initially be composed of 28 small-cap and private companies focused on leading in technological innovations, and will begin trading at 55 times earnings.
The China Story, 2009: Boom or Bubble?
Much has been made of the “China Story” – everything from the next global superpower to the largest economic bubble the world has ever seen. Both may be true, but one can’t deny the unprecedented nature of much of everything China has done just in the past year alone:
- China is now the world’s largest gold producer
- China took over Japan as largest foreign holder of US debt
- China is now Japan’s largest trading partner; not the US
- China began advocating domestic investment in gold and silver
- China’s growth expected to continue at 8% next year
The biggest move, of course, has been China’s massive pressure on the US dollar, particularly the amount of USD held in currency reserves around the world. I’ve followed this story in the articles below. China’s influence has prompted similar sentiments from France, Japan, Brazil and Russia. Most recently, ALBA, a Latin American trade coalition, has planned to introduce a new currency (the Sucre) to replace the USD for intra-regional trade.
Zhou Xiaochuan’s Proposal For World Reserve Currency is Accepted by UN (March 29, 2009)
U.S. Dollar Up For Debate At G8 Meeting (July 5, 2009)
Supracurrency Coin Proposed As New World Reserve Currency (July 12, 2009)
China Diversifies Reserves As Part of “Going Out Strategy” (July 29, 2009)
China’s Biggest One-Day Loss of the Year (August 18, 2009)
World Bank: Don’t Take USD Reserve Status for Granted (Sept. 27, 2009)
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