Few other aspects of reform in China fascinate more than the stockmarket. Since the ﬁrst haphazard trading in shares took place in Shanghai and Shenyang in 1986, when prices were marked up in chalk on blackboards, the market has grown unrecognizable.
Its story has all the makings of a dynastic epic. The market has been at the centre of huge, era-deﬁning policy battles between economic reformers pushing for capitalism and conservatives wanting to preserve socialist controls. As well as the ideological clashes, other disputes erupted in the 1990s as the stockmarket, with its tremendous capacity for generating funds, attracted the envious attention of officials from dozens of government departments.
Bureaucrats from local government, the central bank, the industrial planning apparatus and the securities regulator fought continuous turf wars for the authority to regulate the market. In the market itself, hundreds of fortunes have been made, some legally, and many thousands of small investors have had their savings wiped out by illjudged efforts at “stir-frying” shares (chao gupiao).
Regular scandals, several of which have fundamentally shaken the market, have torn back the veil that normally hides the extensive corruption. For those with an eye on the future, the capital market is one of the most exciting ways in which China can reintegrate with the modern world.
This books explains why and how Chinese equities will effect you and gives you concrete suggestions for how you could also participate in the rise of China.
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