ABSTRACT
Since the adoption of the open door policy in 1979, China has moved from an agricultural-based society to a society where trade and manufacturing enterprises play a more significant role. The turn of the century is characterized by the flooding in of foreign investments, the listing of Chinese enterprises on foreign markets and the development of share capital systems. Two stock exchanges — the Shanghai Stock Exchange and the Shenzhen Stock Exchange — opened on 19 December 1990 and 3 July 1991 respectively. However, in the first year of operation, the two stock exchanges were opened only to domestic Chinese investors. In December 1991, the issuing of B shares (shares in Chinese companies reserved for non-PRC investors) in Shanghai Stock Exchange marked the first trading of shares by foreign investors. Since then, the B-share market has been undergoing rapid development. By the end of 1992, a total of eighteen companies which have issued B shares were listed on the two stock exchanges. In 1993, a third type of stock issued by Chinese state-owned enterprises, H shares, joined the Hong Kong Stock Exchange. There are currently fourteen H shares listed on the Hong Kong Stock Exchange.
