Do the Chinese Have a Stock Market?

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China and its Stock Exchanges

  • Yes. China has three stock exchanges – Shanghai Stock Exchange, Shenzhen Stock Exchange, and Beijing Stock Exchange.
  • The Shanghai Stock Exchange is the largest stock market in mainland China and fourth largest in the world.
  • The Shenzhen Stock Exchange was founded in 1990 along with the modern Shanghai Stock Exchange.
  • The Beijing Stock Exchange opened in 2021.

Types of Shares Traded in Chinese Markets

  • There are two main types of shares traded on Chinese stock exchanges – A shares and B shares.
  • A shares are traded in Chinese currency and historically were only available to domestic Chinese investors.
  • B shares are traded in foreign currencies and available to foreign investors.
  • Many Chinese companies also have H shares traded on the Hong Kong Stock Exchange.

Features of the Chinese Stock Market

  • The Chinese stock market operates differently from other major global markets.
  • It is less open to foreign investors and more affected by government policies.
  • The total value of Chinese stocks is less than a third of China’s GDP, compared to 100% for most developed countries.
  • Chinese households invest far more heavily in real estate than stocks.

Overview of the Chinese Stock Market

  • Still, China has the world’s second largest equity market after the US.
  • The growth of China’s economy is likely to drive further growth in its stock market over time.
  • For investors, the Chinese market provides exposure to many high-quality companies but also comes with higher volatility and less transparency than developed markets.
  • Investing in broad index funds can provide some access while diversifying risk.

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