This paper discusses issues arising from the practice of turning debts into shares and suggests solutions such as establishing a pattern to turn indirect debts into shares, setting up priority shares and convertible bonds, developing a system for employees to hold shares and the system of executive stock options.

This article explains the structure of construction funds for China s railways and analyzes several channels of raising funds for railway construction,then a conclusion is drawn that stock financing should become the main channel of raising funds for China s railway construction.