The characteristics of the stock reduction method are: (1) intuitive, (2) comparable, and (3) because the number of A shares remains unchanged, there is no need to remove the rights when it is fully circulated. (4) Not applicable to the full circulation of B-share or H-share listed companies; (5) The number of shares has decreased, but the amount of capital has not decreased. Therefore, the stock reduction method is the benchmark method of full circulation for the scheme designer and the simplest full circulation method for the A-share shareholders.

The reduction of shares is a reduction of shares, not a reduction of capital, and there is no need to perform complicated capital reduction procedures or apply for company change registration. Similarly, share expansion means increasing shares, not capital increase, and there is no need to go through the formalities of capital increase and apply for company change registration. The author has repeatedly stressed that the share-trading reform is not applicable to the Company Law and the Securities Law, but to the General Principles of Civil Law and the Contract Law. Regardless of share reduction, share expansion or share offering, the historical cost of holding shares by shareholders of C shares remains unchanged. Under the principle of win-win, the shareholders of C shares have realized the premium of circulation rights, and the market price of their shares has not been impaired, but has increased. In the process of share reform, listed companies that only contain A shares and C shares should be free to use the method of reducing their shares or pay cash in the form of reducing their shares.