Here is providing you an overview of the
China Stock Market. As the fastest growing and one of the largest economies of the world the ‘China growth story’ has been nothing short of spectacular and continues to be. No doubt, private enterprise has transformed China on its head but this whole process has been conspicuous by the absence of a regulated capital market for an economy the size of China. Apparently the process of establishing a capital market structure requires a longer gestation than it does to set up an industrial base. But in many ways it is in line with conventional market theory that capital markets evolve only after a certain level of industrialization has taken place. It is evolving in China quite rapidly but perhaps not as fast as one would like, given the size of Chinese industry.
Over the last couple of decades China has manifested tremendous contrasts in its economic progress and the Hong Kong Stock Exchange represents the contrast in China’s capital market structure. The Hong Kong Stock Exchange is one of the world’s premier stock exchanges and its index the Hang Seng, is also one of the most famous indexes of the world. Most other prime stock exchanges such as the London Stock Exchange or the Bombay Stock Exchange reflect the capital market sentiment in their respective economies but not the Hong Kong Stock Exchange. The Hong Kong Stock Exchange has a distinct global dimension and is not integrated to the Chinese economy as the London or the Mumbai stock exchanges are. Therefore, even though the market capitalization of the Hong Kong Stock Exchange adds up to China’s GDP, it does not reflect the health of the country’s capital markets.
Stock exchanges in China
Hong Kong Stock Exchange
The Hong Kong Stock Exchange (HKSE) was established at the end of the 19th century and is the sixth largest stock exchange in the world with a market capitalization of over USD 1.8 trillion. A total of 4,338 stocks are listed on the HKSE.
Shanghai Stock Exchange
The Shanghai Stock Exchange (SSE) was established in November 1990 and is mainland China’s premier stock exchange with 837 listed companies and an investor base of 37.87 million in FY 2004. During the same time SSE’s total market capitalization was RMB 2.6 trillion and the amount of capital raised amounted to RMB 45.7 billion.
Shenzhen Stock Exchange
The Shenzhen Stock Exchange (SSE) was established in 1990 and is second most important stock exchange in mainland China after the Shanghai Stock Exchange. The Shenzhen Stock Exchange has 540 listed companies and 35 million registered investors with a market capitalization of RMB 1 trillion.
Dalian Commodity Exchange
The Dalian Commodity Exchange was established in December 2004 with an estimated projection of handling 200 million tones of soybean futures per year.
Zhengzhou Commodity Exchange
The Zhengzhou Commodity Exchange trades in copper, aluminum, rubber, wheat, soybeans, soybean meals and cotton.