Strongly appealing to people,the Chinese negotiable securities market is becoming brisker day by day.

This market allows businesses to directly raise and accommodate funds through the issuance and transaction of bonds and shares to the public. Since the securities market opened in 1984, an increasing number of state and business bonds, business shares and financial bonds have been issued. According to reports, the total volume of Chinese bonds and shares issued has amounted to 90 billion yuan. Shares accounted for 2 billion, and bonds were about 20 billion. The total volume of shares and bonds issued nationally is expected to reach 100 billion yuan by the end of 1988.

The negotiable securities market has played an important role in the development of the Chinese economy. Savers no longer have to depend on banks alone. Urban residents and enterprises now have a choice of where to deposit their money. Those who choose to invest in the market transform a large amount of idle social capital into long-term funds for production, thus guaranteeing the needs of the state's major construction and enterprises.

At present, not only collective enterprises, but also larger stateowned enterprises issue bonds and shares.

The Chinese security market also deals with shares and bonds.In August 1986, Shenyang Trust and Investment Corporation was the first business in China to start dealing in securities as well as mortgaging bonds. One month ater, the Industrial and Commercial Bank of China, Shanghai Branch started bartering shares for material. Beijing, Harbin and other cities have also adopted securities market. In April of 1988,business markets for state treasure bonds opened in China. To date,the stock market has been established in more than 80 cities.Its transactions include corporate buying and selling, business commissions and discounts and mortgages. The volume of negotiable securities has reached about 1.3 billion yuan.

Although the Chinese negotiable securities market is developing rapidly, there are many problems. The major problem is that the issuing market, with fewer varieties of securities, doesn't match the circulating market. In addition, the issuance of bonds and shares doesn't conform to standards and some related laws have not been established.

To counter this tendency, the People's Bank of China, the institution responsible for the negotiable securities market, has set up security companies and companies to monitor business credit in some cities starting this year.

(No. 51, 1988)