PEKING — China has sanctioned a stock sale to raise $385 million for building the nation's longest railroad line, an official news report said Monday.
It appeared to be the biggest stock offering since the Communist Party resurrected the once-denounced capitalist practice last year to help finance economic development.
The state-run New China News Agency said the stock will be offered by the government of the Inner Mongolia autonomous region, a vast plain along the Mongolian frontier.
The news agency quoted Inner Mongolia's Communist Party Secretary Zhou Huiri as saying that the stock sale will finance the proposed Jining-Tongliao railway, a 540-mile project that, when completed, will be China's longest single rail line.
Details Are Scarce
It will run from the Inner Mongolia city of Jining northeast through Liaoning province to the city of Tongliao in Jilin province, opening an important corridor to move freight and passengers through China's northern interior, the report said.
There was no explanation for how the stock will be sold and whether the buyers will be Chinese, foreigners or both. The report also gave no details of share prices or dividends.
But it was likely that the buyers will not be limited to Inner Mongolia's 19.5 million people, many of them herdsmen who subsist on the barren plains.
Zhou was quoted as saying that the stock sale will begin shortly and that the railway construction is expected to take five years.
The offering follows calls in the official press for large-scale stock sales and hints that China may reopen the Shanghai Stock Market, closed after the Communists came to power in 1949.
"Profitable, well-managed enterprises should be able to raise capital by selling shares and bonds, thus alleviating the huge strain on the state's limited financial resources," the magazine China's Finance said last month.
Shanghai banking managers have said in press reports that a stock market may be established within the next few years.
The English-language China Daily said reopening an exchange in China's largest metropolis is "the debate of the day in financial circles."
The Shanghai newspaper Wen Hui Daily reported in January that the southern city of Zhuhai, a special economic zone designed to lure foreign exchange and technology, would set up a stock market with the help of Hong Kong financiers.