stocks, took place outside of Shang sENE∥ hai's newly reopened stock market. In I948, with changes in the official Chi nese currency and rampant inflation, China's stock exchanges stopped trading until March 1949 MINING CNCOMPANYUMITE That May, when the communists took over Shanghai, the Shanghai Stock Exchange was officially closed and all foreign companies withdrew their 5 》 ions in China 3 The government of the People's Republic of China reopened the Tianjin Exchange in I949 and the Beijing closed again in I952. In 1953, China dopted Soviet Russian central plan ning methods to allocate capital. From I953 to I956, the government gradu- British Mining Company stock issued in 1925 ally purchased Chinese private share- holding companies. The 5 percent fixed dividend paid by the government Kong with Ioo members: 87 foreign lapse in 1883. Trading then took place was based on the government-assessed and I3 Chinese informally as "Teahouse Trading" value of the private shares. These gor A parallel market began when Chi- until 1914, when the Shanghai Chi- ernment payments, amounting to I20 nese companies began to establish for- nese Brokers'Association was founded. million yuan per year to I I4 million eign-style enterprises and raise capital Organized trading resumed based on individual Chinese shareholders, con by issuing shares to private investors. China's first security exchange law. tinued from 1956 to 1966, when pay The first Chinese joint-stock company, Chinese security trading floors were ments ceased. From I953 to 1958, the the Shanghai-based China Merchants set up in Beijing in 1918 and in Shang- government issued bonds to raise Steam Navigation Company, was set hai in 1920 with the Shanghai Security funds for "socialist construction, "but up in 1872 by the Zhu brothers and Commodity Exchange, and in they were never traded under the guidance of the Chinese I92I with the Shanghai Chinese Secu- By the end of 2002, listed companies government's major advocate of west- rity Exchange. Also in I921, Chinas had increased to a total of 1, 224 ern industrialization, Viceroy Li first corporate bonds were issued for domestic companies with a total market Hongzhang. By the early I88os, more the Tonghai Farming Company. The capitalization of 3.8 trillion yuan($457 than Is Chinese-owned companies two Chinese Shanghai exchanges billion). There are currently 68.8 mil had been established and had floated merged in 1933 and were housed in lion Chinese stock brokerage accounts stock in Shanghai. Shares were traded a new Shanghai securities building Related financial services industries informally among shareholders opened in 1934, which became the have also boomed, and there are tives and friends. The Qing Imperial largest and most advanced securities currently 126 securities brokerage government also began to issue govern- market in the Far East. houses with branches throughout ment bonds for industrialization and Most stock trading ceased after China. The country also has 2I fund other needs, particularly financing 1937, when Japan invaded China and management companies that oversee wars with foreign powers took over most of its territory and all 7I investment funds (closed-end and The first Chinese-owned brokerage, of its coastal cities. Stock trading open-end), with total assets of I319 the Shanghai Pingzhun Stock Broker- moved to the over-the-counter market billion yuan(SIS.9 billion) age Company, began trading Chinese and to black market transactions. A China's newly emerging stock stocks in 1882. After a year of growth year after the Chinese and allied vic- markets are unique in many ways. and active trading, a combination of tory over Japan in 1945, the Shanghai First, the majority of Chinese listed over-speculation, failure of silk invest- Stock Market reopened. In addition, companies are large or medium-sized ments,and the coming Sino-French trading in government bonds, as well state-owned enterprises(SOEs)that War of 188 3 led to the company's col- as unlisted and foreign company have been selected by the government, FINANCIAL HISTORY SPRING 2003 Www. financIalhistory.OrgFinancial History ~ Spring 2003 www.financialhistory.org 30 Kong with 100 members: 87 foreign and 13 Chinese. A parallel market began when Chi￾nese companies began to establish for￾eign-style enterprises and raise capital by issuing shares to private investors. The first Chinese joint-stock company, the Shanghai-based China Merchants Steam Navigation Company, was set up in 1872 by the Zhu brothers under the guidance of the Chinese government’s major advocate of west￾ern industrialization, Viceroy Li Hongzhang. By the early 1880s, more than 15 Chinese-owned companies had been established and had floated stock in Shanghai. Shares were traded informally among shareholders’ rela￾tives and friends. The Qing Imperial government also began to issue govern￾ment bonds for industrialization and other needs, particularly financing wars with foreign powers. The first Chinese-owned brokerage, the Shanghai Pingzhun Stock Broker￾age Company, began trading Chinese stocks in 1882. After a year of growth and active trading, a combination of over-speculation, failure of silk invest￾ments, and the coming Sino-French War of 1883 led to the company’s col￾lapse in 1883. Trading then took place informally as “Teahouse Trading” until 1914, when the Shanghai Chi￾nese Brokers’ Association was founded. Organized trading resumed based on China’s first security exchange law. Chinese security trading floors were set up in Beijing in 1918 and in Shang￾hai in 1920 with the Shanghai Security and Commodity Exchange, and in 1921 with the Shanghai Chinese Secu￾rity Exchange. Also in 1921, China’s first corporate bonds were issued for the Tonghai Farming Company. The two Chinese Shanghai exchanges merged in 1933 and were housed in a new Shanghai securities building opened in 1934, which became the largest and most advanced securities market in the Far East. Most stock trading ceased after 1937, when Japan invaded China and took over most of its territory and all of its coastal cities. Stock trading moved to the over-the-counter market and to black market transactions. A year after the Chinese and allied vic￾tory over Japan in 1945, the Shanghai Stock Market reopened. In addition, trading in government bonds, as well as unlisted and foreign company stocks, took place outside of Shang￾hai’s newly reopened stock market. In 1948, with changes in the official Chi￾nese currency and rampant inflation, China’s stock exchanges again stopped trading until March 1949. That May, when the communists took over Shanghai, the Shanghai Stock Exchange was officially closed and all foreign companies withdrew their operations in China. The government of the People’s Republic of China reopened the Tianjin Exchange in 1949 and the Beijing Exchange in 1950, but both were closed again in 1952. In 1953, China adopted Soviet Russian central plan￾ning methods to allocate capital. From 1953 to 1956, the government gradu￾ally purchased Chinese private share￾holding companies. The 5 percent fixed dividend paid by the government was based on the government-assessed value of the private shares. These gov￾ernment payments, amounting to 120 million yuan per year to 1.14 million individual Chinese shareholders, con￾tinued from 1956 to 1966, when pay￾ments ceased. From 1953 to 1958, the government issued bonds to raise funds for “socialist construction,” but they were never traded. By the end of 2002, listed companies had increased to a total of 1,224 domestic companies with a total market capitalization of 3.8 trillion yuan ($457 billion). There are currently 68.8 mil￾lion Chinese stock brokerage accounts. Related financial services industries have also boomed, and there are currently 126 securities brokerage houses with branches throughout China. The country also has 21 fund management companies that oversee 71 investment funds (closed-end and open-end), with total assets of 131.9 billion yuan ($15.9 billion). China’s newly emerging stock markets are unique in many ways. First, the majority of Chinese listed companies are large or medium-sized state-owned enterprises (SOEs) that have been selected by the government, British Mining Company stock issued in 1925. © Chinese Securities Certificate Rarities Collection