China stock market

The China stock market is centred on three different stock exchanges:

• Shanghai Stock Exchange
• Shenzhen Stock Exchange
• Shanghai Metal Exchange

Shanghai Stock Exchange

The Shanghai Stock Exchange is a non-profit institution headquartered in Shanghai, China. Its history goes all the way back to 1891 when it was founded as Shanghai Sharebrokers' Association. It was renamed Shanghai Stock Exchange in 1904 and kept this name until the exchange was suspended by the communist party in 1949. The Shanghai Stock Exchange was re-established in 1990 and is today administered by the China Securities Regulatory Commission (CSRC).

The Shanghai Stock Exchange is one of the major actors on the China stock market with a market capitalization of almost US$1.7 trillion. It is the biggest exchange on the China mainland and the 9th largest in the entire world.

As a part of the fight against SARS (Severe Acute Respiratory Syndrome), the central government of China shut down trade on both the Shanghai and Shenzhen stock exchanges for over a week from May 1 in 2003.

Shenzhen Stock Exchange

Shenzhen Stock Exchange is a major part of the China stock market and currently lists over 1,200 companies. In 2005, the combined market capitalization reached a whooping US$500 billion, thereby rivalling the renowned Hong Kong Stock Exchange. The Shenzhen Stock Exchange and the Hong Kong Stock Exchange are constantly competing over the place as the second-largest Asian stock market (Tokyo is indisputably the largest one).

In this part of the China stock market, a majority of the companies are companies where the Chinese government has controlling interest. Until 2005, two-thirds of the shares in companies listed here were non-tradable, which lead to the tradable shares being prices much higher than their proportion in each listed company. The 2005 year Chinese stock issue reform radically changed the China stock market by turning non-tradable shares into tradable ones, while simultaneously compensating the owners of tradable shares by letting them have extra equity in the company.

Today, the Chinese government views the Shenzhen Stock Exchange and the entire China stock market as a way of raising capital and has announced no interest in privatising or selling off the state controlling interest in their State Owned Enterprises.

Shanghai Metal Exchange

The Shanghai Metal Exchange, abbreviated SHME, in a national level futures exchange in the People's Republic of China. Established as late as 1992, the Shanghai Metal Exchange is a non-profit, self-regulating corporation. This exchange is focused on trading non-ferrous metals, such as lead, zinc, copper, nickel, aluminium and tin. It is currently the largest non-ferrous metals futures exchange on the China stock market and also the third largest in the entire world.

As its name suggests, the Shanghai Metal Exchange is located in Shanghai and this location makes it possible for this exchange to bridge the time gap between the New York Mercantile Exchange and the London Metal Exchange. Traders who want to be able to access futures contracts of non-ferrous metals around the clock can jump between these three exchanges.

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