🇨🇳 History of the Shanghai Stock Market

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🇨🇳 History of the Shanghai Stock Market

The creation of the International Settlement (foreigner concession area) in Shanghai was the result of the Treaty of Nanking in 1842 (which ended the First Soybean War) and subsequent treaties between the Chinese and foreign governments, which had foreign influence in the development of China's foreign trade and Shanghai's foreign trade relations. The Shanghai stock exchange market began in the late 1860s. The first stock listing took place in June 1866, by which time the Shanghai International Settlement had developed favorable conditions for the emergence of a stock market, including multiple banks, joint stock company regulations, and a willingness to diversify established trading companies (although the trading companies themselves remained partnerships).

During the 1880s and 1890s, during the mining stock boom, foreign securities firms established the "Shanghai Stockbrokers Association" headquartered in Shanghai as China's first stock exchange. In 1904, the association applied for registration in Hong Kong under the provisions of the Companies Act and was renamed the "Shanghai Stock Exchange". Most of the stock offerings were from local companies. In the early days, banks controlled private equity, but by 1880, only local banks in Hong Kong and Shanghai remained.

Then, in 1920 and 1921, respectively, the "Shanghai Stock Exchange" and the "Shanghai China Merchant Exchange" were opened. A merger finally took place in 1929, after which the combined market operated as the "Shanghai Stock Exchange". Shipping, insurance, and ports continued until 1940, but after the Treaty of Shimonoseki in 1895, industrial interests came into play, and Japan, and by extension other countries with treaties with China, were also allowed to set up industries in Shanghai and other treaty ports. Rubber plantations became the center of stock trading from the 20s of the 20th century.

By the 1930s, Shanghai had emerged as the financial center of the Far East, allowing Chinese and foreign investors to trade stocks, bonds, government bonds, and futures. After the Japanese army occupied the Shanghai International Settlement on December 8, 1941, the operation of the Shanghai Stock Exchange was abruptly suspended. The Shanghai Stock Exchange resumed operations in 1946, but closed again in 1949, three years after the Communist Revolution.