Western capitalism in China : a history of the Shanghai Stock Exchange

Emerging stock markets have attracted considerable academic interest over the last ten years. The growth of these emerging markets has been impressive as developing countries seek to mobilize both domestic and international funds to finance investment. In this respect the stock exchange has become a symbol of development. Yet many new markets have been characterized by high price volatility, variable trading conditions and occasional 'crashes'. Chinese markets are no exception to these trends. Drawing on a range of primary and secondary sources, including a collection of weekly share lists of the early market and later of the stock exchange from The North China Herald, Arthur Thomas examines the financial evolution of Shanghai and the contribution of the major western banking institutions which financed the early import and export trade. Opening chapters provide an account of the commercial activity of the area, the genesis of the share market, its organizational development and dealing methods, and the leading brokers and broking firms in Shanghai. The latter part of the book chronicles the behaviour of the market and the influences which produced periodic booms, crises and slumps, culminating in the final collapse of the market with the arrival of war in 1941. The late 1980s witnessed the re-emergence of the Chinese market with 'experiments' in Shanghai and Shenzhen. These emerging experimental stock markets grew rapidly with considerable potential in their early years, but they have also been prey to high volatility and difficulty in building up a developed financial infrastructure. Western Capitalism in China explores the fluctuations in the fortunes of the Shanghai Stock Exchange and points to favourable future potential, with the possibility of a major market consolidation in the future. W. A. Thomas lectures in the Department of Economics and Accounting at the University of Liverpool.

Emerging stock markets have attracted considerable academic interest over the last ten years. The growth of these emerging markets has been impressive as developing countries seek to mobilize both domestic and international funds to finance investment. In this respect the stock exchange has become a symbol of development. Yet many new markets have been characterized by high price volatility, variable trading conditions and occasional 'crashes'. Chinese markets are no exception to these trends. Drawing on a range of primary and secondary sources, including a collection of weekly share lists of the early market and later of the stock exchange from The North China Herald, Thomas examines the financial evolution of Shanghai and the contribution of the major western banking institutions which financed the early import and export trade. Opening chapters provide an account of the commercial activity of the area, the genesis of the share market, its organizational development and dealing methods, and the leading broker and broking firms in Shanghai. The latter part of the book chronicles the behavior of the market and the influences which produced periodic booms, crises and slumps, culminating in the final collapse of the market with the arrival of war in 1941. The late 1980s witnessed the reemergence of the Chinese market with 'experiments' in Shanghai and Shenzhen. These emerging experimental stock markets grew rapidly with considerable potential in their early years, but they have also been prey to considerable volatility and difficulty in building up a developed financial infrastructure. Western Capitalism in China explores the fluctuations in the fortunes of the Shanghai Stock Exchangeand points to favorable future potential, with the possibility of a market merger with Hong Kong. Contents: Illustrations; Acknowledgments; Introduction; Part I: The Shanghai Stock Exchange; 1. Founding the Rising Emporium; 2. The Commercial Framework; 3. The Supply of Securities; 5. The Demand for Securities; 4. Fixed Interest Stocks; 5. The Demand for Securities; 6. Share Market and Stock Exchange; 7. Market Fluctuations 1860-1909; 8. From Revolution to 1929; 10. The Final Years; Part II: Chinese Stock Exchanges; 11. Chinese Stock Markets, 1911-1949; 12. Emerging Markets; Bibliography; Index

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Thomas (economics and accounting, U. of Liverpool), relying heavily on articles and share lists published in and reports in Shanghai's financial weekly traces the broad development of the Shanghai stock market from its genesis in the latter half of the 19th century to its last trading day in 1941. The author looks at the organizational development and dealing methods and looks at the behavior of the market as it contended with such events as the 1910 rubber boom and the fateful year of 1929. A final chapter looks at the history of other Chinese markets. Annotation c. Book News, Inc., Portland, OR (booknews.com)

Contents 5 List of illustrations 6 Acknowledgements 7 Introduction 9 Part One: The Shanghai Stock Exchange 13 1 Founding the rising emporium 15 2 The commercial framework 30 3 The supply of securities 47 4 Fixed interest stocks 71 5 The demand for securities 90 6 Share market and Stock Exchange 105 7 Market fluctuations 1860-1909 130 8 Shanghai’s rubber boom 157 9 From revolution to 1929 199 10 The final years 221 Part Two: Chinese Stock Exchanges 253 11 Chinese stock markets 1911-1949 255 12 Emerging markets 287 Bibliography 325 Index 333