China's Stock Market

The China’s stock exchange market

The china’s stock market is complex and goes back to the 18th Century, it took long time to be established as the business trading with foreign market growth. The entire market is mainly established in shanghai, but directly tied with the exchange market in Hong Kong and Shenzhen. In history the Chinese exchange marker had closed due to different reasons suchas war. Now days china is rank as 5th biggest market in the world just behind New York and Tokyo, despite booms and recessions Chinese stock market keep been in continuously growth

Back in 1842, by the ending of the first opium war, in shanghai was established the international settlement (treaty of Nanking) consequently this development brought the emergence of foreign markets in the area.But it was after two decades of establishment that the stock market really begging to operate, by 1866 the first share list began to appear with it a number of banks and joint-stock companies to be formed and the shanghai share brokers associations by foreign businessmen.

Since the beginning the government have had direct influence over the market with the launched of the mining industry boom bythe late 1880s, following with a boom in real estate companies and rubber plantations. The wave of confidence in these areas was partly due to cheap credit being offered by banks, something that eventually ended in bust.

During 1895 the treaty of Shimonoseki opened China to foreigners invertors and it was not until 1920s that shanghai open the operations with the establishment of Shanghaisecurities and commodities exchange and Shanghai Chinese merchant exchange, started up wit over 140 stocks and by 1930 china had emerged as the financial center of the region. Where both Chinese and foreigners’ investors could trade stocks, funds and bonds. Due to the Japanese troops occupied at the international settlement in 1941 and the communist revolution took place in 1949 those events causethe temporary close of the exchange market for over forty years with brought economic instability in the country.


Different from the hong kong market exchange, shanghai market exchange have two types of stocks being issued in the Shanghai Stock Exchange: "A" shares and "B" shares. A shares are priced in the local yuan currency, while B shares are quoted in USD. Initially, trading in A sharesare restricted to domestic investors only while B shares are available to both domestic and foreign investors. However, after reforms were implemented in December 2002, foreign investors are now allowed with limitations to trade in A shares under the Qualified Foreign Institutional Investor program which was officially launched in 2003. Unlike the Hong Kong exchange market, the shanghai marketstill not complete open to the foreign investors.





There was no trading in stocks in China for over two decades until the cultural revolution of the 1970’s. Initially this was only open to the Chinese, with it opened to foreign investors from 1978. Companies began to trade securities with foreign firms and this caused a surge in the economy.

Another stock exchange was also opened inchina mainland located Shenzhen, which dealt with technology and government securities. Shenzhen and Shanghai the maintenance of the Shenzhen Stock Exchange was placed under the direct management of the China Securities Regulatory Commission, the Stock Exchange's general manager and vice general manager of the China Securities Regulatory Commission appointed a chairman, the vice chairman was given bythe China Securities Regulatory Commission.


In 1997 the Hong Kong Stock Exchange was implemented into the Chinese system. Due to the fact that Hong Kong had long been a British protectorate, special laws were established for the area that made the Hong Kong Stock Exchange more privatized than either Shanghai or Shenzhen. Both the Shanghai and Hong Kong Stock Exchanges are located very close...