Commentary: China Must Embrace M&A to Unclog Its Stock Market

At 85, Chinese entrepreneur Xia Zhisheng recently sold his controlling stake in kitchen appliance maker Zhejiang Meida Industrial Co. Ltd. for 1.29 billion yuan ($190 million). Facing an aging founder and a tough market, the company needed a transition. Rather than a tale of defeat, Xia’s exit marks a milestone for China’s capital markets. It points to a long-ignored truth: mandatory delisting should not be the only exit door for the A-share market. Market-driven mergers and acquisitions can gracefully reallocate resources to the next generation of productive forces.