China’s Stock Exchange Markets

Researchers have conducted research into the growth and development of China’s stock market. The stock market has been around since the nineteenth century (Chavis, 2017). Furthermore, it is listed on the Shanghai Stock Exchange, as well as Shenzhen and Hong Kong. The foundation of the Stock Exchange was forced by the First Opium War. In this regard, securities trading was developed in the 1860s (Chavis, 2017). This article summarizes the many research conducted on the Chinese stock market in order to better understand its growth, functioning, and evolution.

China’s Stock Market Collapse and Government’s Response, 1-6.

Nargiza Salidjanova, a senior policy analyst, in this article looks at the circumstances that led to the downfall of the Chinese Stock Market and the authority’s response to remedy the situation. First, he highlights that during an acute volatility in early 2015, the market started to experience a surprising fall. As a result, Shanghai stock market fell down 25% after a few weeks (Salidjanova, 2015). Nargiza highlights that entrepreneurs had suffered a loss of close to 3.5 trillion U.S dollars, this was equivalent to country’s total market commercialism in 2012 (Salidjanova, 2015). Chinese authority reacted with excessive obstructions, calling for brokerages to acquire and forbid shareholders from selling. American Policymakers made important conclusions that were aimed to inform potential investors about the Chinese situation.

Bryson, J. (2015). Economics Group. Chinese Stock Market Crash: A Bad Omen for China? 410-3274.

Jay Bryson, a global economist, looks at two leading market indicators that led to a drop of more than 30% in 2015 (Bryson, 2015). Further, he highlights the structures of China and United States economies. Notably, the Chinese economy is funded by banks to a great extent whereas U.S economy; impartiality markets perform a vital role in joint financing and equity entail a few number of household shares (Bryson, 2015). Also, he looks at how business fixed investment, BFI, spending led to the decline of Chinese share rates. Jay also discusses how Chinese consumer expenditure affects the stock market.

Bradstreet, D. (2015). Special Briefing. China’s Stock Market Crash, 1-4.

The article provides an overview of Shenzhen and Shanghai stock exchange markets. Also, it highlights the role of the ministry of finance, the central bank and regulatory firms in arresting the downfall in the stock market (Bradstreet, 2015). Additionally, the articles discuss the role China Securities Regulatory Commission, CSRC plays in the Chinese stock market and their policies to regulate it. Importantly, it gives the commercial significance of the various policies taken on the stock markets and in turn offers suggestions to be considered before coming up with different policies.

Dalio, R., Dinner, M., Kryger, S., Prince, B., & Rowley, B. (2015). Bridgewater Daily Observations. Greater Risks In China, 226-3030.

In the Greater Risks in China article, the authors look at the recent developments in the Chinese stock market (Dalio, Dinner, Kryger, Prince, & Rowley, 2015). First, in section one of the article, they highlight why their perception about the Chinese Stock Market has changed. Further, in section two, they give the approximated size of losses incurred and the depreciation in psychology. The authors also look at China’s strategies to support the market. Additionally, the article highlights economic and credit reactions to the recent market developments and the strategies by the Chinese government.

Bendini, R. (2015). Policy Department, Directorate-General for External Policies. Exceptional measures: The Shanghai stock market crash and the future of the Chinese economy, 4-13.

Robert looks at Shanghai stock market crash (Bendini, 2015). He highlights the loss suffered by Chinese entrepreneurs as a result of the market crash. Besides, he gives reasons why the effects of the crash were comparably limited. The article also highlights Beijing’s emergency actions taken to address the market crash. Importantly, it focuses on how the Shanghai Market crash affected the Chinese economy.

Rana, R. (2015). ICS Analysis. Deconstructing the Shanghai Stock Exchange Crash, 2-6.

The article gives major the reason for the rapid growth of the Shanghai stock market. Also, it provides an in-depth analysis of the Shenzhen and Shanghai market crash. First, it looks at the reasons that led to the market crash. For instance, it discusses how substantial price fluctuations contributed to the crisis (Rana, 2015). Further, it focuses on the effects of the crisis on the stock indicator, investors and companies running their businesses in China. It exclusively looks at measures taken by the People’s Bank of China to enhance liquidity to counter the crash. Additionally, it highlights the impacts of the actions taken to combat the crash.

My Take

In my opinion, stock exchange market plays a crucial role in China’s economy. First, it acts as a source of investment capital. The absence of stock exchange markets would necessitate business enterprises to borrow loans from financial institutions which have to be paid with interest. Luckily, business enterprises in China can subject their shares to the Chinese citizenry via the stock markets, thus accruing a large amount of money which does not require a repayment commitment. Therefore, the business enterprises can widen their operations and generate new employment opportunities for the Chinese population. Consequently, this reduces the level of unemployment among the Chinese people and enables the Chinese government to get extra revenue from the enterprises.

Stock markets encourage investments in China. Investments play a vital role in driving economic trade and development of a country. China has developed rapidly due to investments from countries like the U.S. and its citizenry. Shanghai and Shenzhen have become the leading place for entrepreneurs to invest. Therefore, stock markets with high rates attract companies to invest in China. It is for this reason that the Chinese government is taking the necessary measures to avoid their stock markets from crashing. As such, this will have negative impacts on the economy, since investors lose their money as a result of the Market crashing.

References

Bendini, R. (2015). Policy Department, Directorate-General for External Policies. Exceptional measures: The Shanghai stock market crash and the future of the Chinese economy, 4-13.
Bradstreet, D. (2015). Special Briefing. China’s Stock Market Crash, 1-4.
Bryson, J. (2015). Economics Group. Chinese Stock Market Crash: A Bad Omen for China? 410-3274. 
Chavis, J. (2017, September 26). Bizfluent. Retrieved from The History of China’s Stock Market: https://bizfluent.com/about-5070399-history-chinas-stock-market.html
Dalio, R., Dinner, M., Kryger, S., Prince, B., & Rowley, B. (2015). Bridgewater Daily Observations. Greater Risks In China, 226-3030.
Rana, R. (2015). ICS Analysis. Deconstructing the Shanghai Stock Exchange Crash, 2-6.
Salidjanova, N. (2015). U.S- China Economic and Security Review Commission. China’s Stock Market Collapse and Government’s Response, 1-6.