Easing listing requirements will help enterprises realize their innovations

THE CURRENT stringent requirements on corporate profitability will be eased to enable innovative startups in tech, bio-tech and high-end manufacturing to apply to be listed before they become profitable if they meet certain standards set by the authorities, according to a notice published by the State Council, China's Cabinet, on Friday. Beijing News comments:

Removing "profitable" from among the compulsory conditions for innovative enterprises is a timely adjustment, as what is important for newly founded enterprises pursuing innovations is not how much profit they make now, but how much profit they might potentially make in the future.

The primary purpose for companies entering the stock market is to secure capital. That only the profitable enterprises are eligible has driven a number of Chinese enterprises to foreign stock markets, where the standards are less restrictive. Alibaba and Tencent, two Chinese IT giants, are both listed in the United States.