Abstract

China is a large developing country with a socialist ideology that is currently undergoing a period of reform and transformation. In December 1990, China opened its first national securities market - the Shanghai Securities Exchange. This was soon followed in November 1991 by the first special shares denominated in foreign currencies and sold only to overseas investors. These important steps in the development of China’s securities industry indicate commitment by Chinese authorities to the two key components of the nation’s economic reform program - economic systemic reform, and opening to the outside world. China’s securities market and securities regulations contain some unique characteristics, and this paper gives an overview of the history and fundamental features of the securities market and securities regulations in China. This paper also compares the Chinese and U.S. securities markets in order to evaluate the development of the Chinese securities market, and make recommendations for future reforms in Chinese securities regulations.