The Shanghai Stock Exchange, the Chinese mainland's major bourse, turned twenty on December 19. CCTV reporter Guan Xin takes a look at how the index has changed the way many Chinese people manage their wealth.
Shanghai is home to the world's second largest stock market in terms of market value. More than 2,000 shares are traded on the bourse, despite the market being relatively young at just 20 years.
Back on the market's opening trading day in 1990, there were only 30 shares, and just 49 deals were reached.
No one knows that early time better than millionaire Yang Huaiding, who is one of the earliest individual investors in China. At first, many people lacked confidence in shares in Chinese companies. They preferred to save their money in banks. But Yang was ambitious enough to invest his money. It was a risk that paid dividends and eventually made him a millionaire through stock investment.
At that time, a family with 10,000 yuan was considered wealthy. Yang feared going to jail, because stock investment was considered speculation, and capitalism. Laboring with one's hands to earn money was still considered more honorable.
But Yang was reassured by the words of former Chinese leader Deng Xiaoping, who pioneered the country's reform and opening up.
"When Deng Xiaoping travelled to Shanghai, he said the securities market does not belong to capitalism or socialism. He encouraged us to give it a try and develop it," Yang said. "Now, 20 years have passed. It's remarkable how things have changed."
Today in China, stocks are a common investment among many people.
No where is this more evident than in Shanghai, where taxi drivers are familiar with investment tactics. Stock trading accounts in China exceeded 150 million this year, account for nearly one out of 10 among the country's population. The Chinese Government has encouraged people to invest in capital markets to manage their wealth, generate more income and cope with inflation.
"Through investment in stock markets, investors can use their spare capital in enterprises they consider sound. They can share the fruits of these enterprises' development," said Shang Fulin, Chairman of Chinese Securities Regulatory Commission.
But the market does have its share of ups and downs. In 2007, the market hit an unprecedented 6,124 point in a feverish bull run. But the bubble collapsed, with the index slumped to below 2,000 points. This triggered pain for stock investors, but served a valuable lesson in rational investment.
(CNTV.cn December 20, 2010)