Published on : 25/07/2024
On July 25, 1984, the Beijing Tianqiao Department Store Co., Ltd. (天橋百貨) was established. It was the first formally registered joint-stock commercial enterprise after the establishment of the People's Republic of China, and the first enterprise to be transformed from a state-owned enterprise to a joint-stock company.
The Beijing Tianqiao Department Store was initially founded in April 1953. Its original name was the Fourth Wholesale Department (第四批發部) of the Beijing City Company of China Department Store.
It was later renamed Tianqiao Department Store, an enterprise owned by the whole people.
At that time, as the Reform and Opening-up had just been implemented, China's market economy was still weak. The stability of prices was supported by financial subsidies; the rate of industrial growth was maintained by bank loans; and there were also problems of excessive money and shortage of funds.
Therefore, through the issuance of stocks and bonds, enterprises were able to raise funds directly from the market and invest them in production and construction, alleviating the pressure of banks.
Taking Beijing Tianqiao Department Store as an example, it was originally just a division-level unit under Beijing Chongwen District Department Store, and even its general manager did not have the autonomy to run the business.
At the same time, the company's operating site was very rundown but there was no budget to renovate. After discussion, all stakeholders believed that the implementation of the joint-stock system reform would be an effective way out.
The first batch of stocks issued by the Beijing Tianqiao Department Store after its establishment was worth 3 million CNY.
Each share was worth 100 CNY, with a redemption period of five years and an annual interest rate of 5.4%; at maturity, they would return the principal and share dividends.
The initial public offering of Beijing Tianqiao Department Store was very popular and was fully subscribed within five or six days. The successful precedent of Beijing Tianqiao Department Store later made the joint-stock system a major form of company reorganisation.
