Third stage: 1999-2008 Third Stage: 1999-2008 . ST S: stocks that have not started the reform on negative net profit for consecutive 3 years, in the risk of delisting ST: stocks with poor performance Delisting SST: poor performing stocks that have not Adopted since Feb 25, 2005 started the reform on non-tradable shares Stocks for very poorly performing firms are SST: stocks that have made negative net profit not allowed traded in the stock for consecutive 3 years, in the risk of cease SST: stocks that have not started the reform on non-tradable shares and in the risk of cease listing Third stage: 999-2008 Third Stage: 1999-2008 Stock Market(SSE Composite Index, 00000I ss 牌L193-11951419191420-1-加12051-1 Third Stage: 1999-2008 Third Stage: 1999-2008 Monthly PIE Turnover ratio 995 96 1399|920002012002 oo JanoI jav02 panny lano Jan/s Janos Jane, Jan/D8 Shanghai· Shenzhen9 Third Stage: 1999~2008 — *ST ◦ negative net profit for consecutive 3 years, in the risk of delisting — Delisting ◦ Adopted since Feb 25th , 2005 ◦ Stocks for very poorly performing firms are not allowed to be traded in the stock exchange 5-49 5-50 Third Stage: 1999~2008 — S: stocks that have not started the reform on non-tradable shares ； — ST: stocks with poor performance — SST: poor performing stocks that have not started the reform on non-tradable shares — *ST: stocks that have made negative net profit for consecutive 3 years, in the risk of cease listing — S*ST: stocks that have not started the reform on non-tradable shares and in the risk of cease listing 5-51 Shanghai Stock Exchange Composite Index 0 500 1000 1500 2000 2500 1991-1-11993-1-1 1995-1-11997-1-11999-1-1 2001-1-12003-1-12005-1-1 Third Stage: 1999~2008 5-52 Third Stage: 1999~2008 — Stock Market (SSE Composite Index，000001.ss) Third Stage: 1999~2008 — Monthly P/E 5-53 0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 Jan/99 Jan/00 Jan/01 Jan/02 Jan/03 Jan/04 Jan/05 Jan/06 Jan/07 Jan/08 Shanghai Shenzhen Third Stage: 1999~2008 — Turnover Ratio 5-54 0 200 400 600 800 1000 1200 1400 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Shanghai Shenzhen