The Shanghai Assets and Equity Exchange and the Shanghai Technology Stock Exchange will merge Thursday to create a unified exchange that will be used as a ground for reforming state-owned enterprises.

Sources from both exchanges confirmed the merger will take place tomorrow and the establishment of the Shanghai United Assets and Equity Exchange will be announced then.

"The merger will be officially announced on Thursday," a source from the Shanghai Assets and Equity Exchange said.

Both sides declined to give details on how the new exchange will operate.

The merger is in line with efforts by the city government to step up the restructuring of SOEs following the establishment of the State-owned Assets Supervision and Administration Commission of the municipal government this year.

The new exchange will be a platform for trading ownership of unlisted companies as the Chinese government moves to trim its role in SOEs.

Through the exchange, state-owned assets will be sold through the public bidding system to ensure transparency and fair play.

The Shanghai Assets and Equity Exchange was set up in 1994 to focus on trading of established assets or companies while the Shanghai Technology Stock Exchange was launched in 1999 to concentrate on trading of technology-heavy projects.

But the business scope of the two exchanges gradually began to overlap in recent years, as they vied with each other for the dominant position in asset trading, according to officials.

(Shanghai Daily December 17, 2003)