The Lanhai Equity Exchange recently completed its official registration and will be operational in April in the coastal city of Qingdao, a move experts said is a breakthrough in the development of the local capital market.

The exchange was established after Qingdao was approved by the central government as a pilot zone for wealth management early this month.

Located in the Jinjialing area of Laoshan district, home to a large number of financial institutions in the city, the exchange is key to the city's plan to build a multi-tier capital market that helps pave the way for the wealth management pilot zone, according to the city government.

Jointly founded by the country's five leading securities companies, the exchange will offer multiple services for local investors.

It will also be a new source of financing for the city's many small and medium-sized enterprises.

There are already more than 20 regional equity exchanges in the country.

The Lanhai Equity Exchange and the Qilu Equity Exchange in Zibo will be two pillars of the capital market in Shandong province, said officials.

Qi Jiabin, Party chief of Laoshan district, said the new exchange offers an invaluable financing channel for companies - especially SMEs in the region.

"At present, bank loans remain the major financing channel for a majority of companies," Qi said. "But SMEs can seldom secure large loans from banks.

"Lanhai is designed to offer an ideal financing platform for SMEs in Qingdao and its neighborhood."

Qi said the equity exchange is an important step in Laoshan district's plan to become the financial hub of Qingdao.

Wealth management and its related industries will be the priority in Laoshan's development, he said.

And the government of Laoshan will continue to improve the local business environment through offering better services and infrastructure, said Qi.

In 2012, the Qingdao city government decided to develop the Jinjialing area of Laoshan into a financial zone.

Covering 23.7 square kilometers, Jinjialing now has 192 financial institutions, twice the number in 2011. Tax revenues from the financial industry reached 2 billion yuan ($328 million), also double the 2011 figure.

The long-term goal for Jinjialing is to become a central business district for Qingdao and a regional financial hub between Shanghai and Beijing, according to the Laoshan government.

While attracting banks and firms working in securities, insurance, equity and wealth management, the government also welcomes other companies from home and abroad to open regional headquarters in Laoshan.

At present 18 projects with a combined floor space of 2.1 million sq m are under construction. The total office space in the Jinjialing area is designed to reach 27 million sq m.

Eleven projects with total floor space of 1.04 sq m have been completed, including a training center by the Peking University-HSBC School of Business that opened in April last year.

huqing@chinadaily.com.cn

(China Daily 02/28/2014 page24)