ABSTRACT
In the overall context of gugai, the behaviour of individual investors is important. By observing individual investors in Shanghai’s trading rooms, this chapter finds they are not immature but chao and tao (‘stir-fry’ and ‘get stuck’) through major policy changes and reforms. Individual investors do not fit conventional models, so require a rethinking of rationality, uncertainty and market maturity.With da-xiao fei, the large and small ‘nons’ that emerged as a direct result of gugai, it is xiaofei, the non-controlling shareholders with large chunks of ownership, who pose real danger to the market (the state as the dominant dafei holds its shares even if they become tradeable (I return to concept of da-xiao fei below). Further, the contradiction between market driven by policy and failure of state to regulate the market, signals the tension between risk and uncertainty and focuses attention on investment behaviour to understand what is really going on. In addition, the significance of small investors and spillover of trading rooms into the city shows the legacy of stock markets in China is not transitional but an alternative way of structuring securities finance. The incredible rise and fall of China’s stock markets from 2006 to 2008 cannot
be explained solely by exogenous factors all of which assume a singular yardstick of market functionality, nor can they be explained completely by changes, practices and processes internal to China.This chapter focuses on individual investors, and especially those investing less than US$100,000, as a critical part of the market.One postulate is that it is precisely these ‘micro-’ investors who, despite the general consensus that China’s stock markets are policy markets, keep the state from regulating the market. By examining both urban stock trading rooms in Shanghai, and interviewing individual stock investors, this chapter argues for a different understanding of stock markets in China, as well as engaging the market at a neoliberal level.The spread of stock trading rooms in China’s cities points to the production of space through exchange. Something spills over, a form of externality, in the everyday trading in and proliferation of these trading rooms.This chapter adopts an ethnographic approach in order to undertake a discussion about the significance that arises from individual investors. It is also engages the neoliberal perspective even if the goal is to take a standpoint of incommensurability against the normalising neoliberal market perspective in explaining both the rise and fall of the market and the actions of investors in the trading room and beyond. If China’s stock market is a ‘policy market’, how do we reconcile this with Old
Chen’s quote above? The disappointment with the ‘national team’ of ICBC, BoC and other large enterprises, as with football (Lozada 2006), points to a cosmopolitanism of Shanghai investors who consume stocks to engage with economic life on an everyday basis in a changing city, but also as a ‘ticket’ to ride the fast lane of
China’s economic development.But China’s ‘national team’ do not grow or increase in value at the same rate as China’s economy. It is possible to draw on general understandings of the stock market that can be called ‘shared’ understanding.Yet variety exists among individual investors in terms of economic life that is integrated into the city via spillovers from stock trading.
