Resumption of IPOs will keep stock market sound

Just as China's stock market jumped more than 20 percent from its August low, the China Securities Regulatory Commission announced on Friday that it will resume initial public offerings, which were halted amid a market rout in July.

Reactivating the stock market as an important channel to raise funds for domestic enterprises is understandable given innovation's role as a key driving force for future economic growth.

If China is to maintain at least 6.5 percent GDP growth in the coming five years, the stock market must assume a bigger role in financing the expansion of domestic companies, especially the innovative ones that are crucial to the development of new industries and upgrading of traditional sectors.