Wu Xiaoqiu harshly criticizes "lying flat" publicly listed companies: it's unreasonable to enjoy profits without doing any work

On March 27, the Boao Forum for Asia 2026 Annual Conference was held in Boao, Hainan, from March 24 to 27. At the forum “Creating a Favorable Market Environment and Advocating Long-Term Value Investment,” Wu Xiaoqiu, Dean of the National Financial Research Institute at Renmin University of China, said: “There is a problem in China’s market. Once a company gets listed, it becomes a one-and-done process—it goes into a ‘sit back and relax’ mode. The founder’s net worth can change from tens of millions to dozens of billions. As long as they don’t cross regulatory red lines and they don’t engage in financial fraud, false information disclosure, or insider trading, it doesn’t matter even if they do nothing.”

Wu Xiaoqiu further said, “This is a very bad thing. The capital market can’t work like this. You can’t just enjoy the benefits of being listed and do nothing—first profit by cutting holdings and cashing out, then sell off the company shell resources and make two rounds of profits. That’s just not reasonable. So I believe listed companies in China’s market need to form a reasonable governance structure. In the past, our understanding of corporate governance structures was mostly about the relationship between the shareholders’ meeting and management. That is certainly important, but even more important is market constraint—this is also why M&A is extremely important in China’s market.”

He said, “In the past, the scale of China’s M&A and restructuring market was very small, and it was also viewed with bias, because in the history of the past, M&A was often accompanied by insider trading. For a long time, therefore, the approval difficulty of M&A in China’s market has been extremely high and subject to very strict regulation. The CSRC once had an M&A and restructuring committee, whose review was even stricter than the IPO review committee—because they were worried about insider trading. And in China’s history, M&A has indeed had links to insider trading. So now we need to crack down on insider trading severely, so that M&A can become a key market tool for regulation and adjustment. The core value of M&A is to form a market for control rights. Without the formation of a market for control rights, the market will lose direction and fluctuate arbitrarily.”

Wu Xiaoqiu said, “So the market must form three kinds of mechanisms through rules: first, an incentive mechanism; second, a pressure mechanism; and third, an exit mechanism. Delisting comes in many types. Among them, two types must be accompanied by compensation: the delisting resulting from fraudulent listing, and the delisting caused by serious violations and illegal conduct by listed companies. In these two cases, investors must be compensated. As for transaction-based delisting and financial-based delisting, no compensation is required. This must be made clear in advance. On the basis of this set of rules, we will build an incentive mechanism, a pressure mechanism, and an exit mechanism—so that this market can gradually move toward maturity.” (Yan Yan)

(Editor: Wen Jing)

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                                                            Listed companies