The History Of The Shanghai Stock Exchange

Beginnings in the 19th century

The first city in mainland China where shares, stock trading and stock exchanges originated was Shanghai. In Shanghai, share trading began as early as the 1860s. An early form of stock exchange, the Shanghai Share Brokers Association, was established in Shanghai in 1891. Later in the 1920s, Shanghai became the financial centre of the Far East when the Shanghai Securities Goods Exchange and the Shanghai Chinese Securities Exchange were established. Foreign and Chinese investors could trade stocks, bonds and futures there. In 1946, the Shanghai Chinese Security Exchange was named Shanghai Securities Exchange Co. Later, in 1949, all securities transactions were closed. China’s reform and opening up and the development of the socialist market economy have expanded the Chinese securities market since 1980. The offering of government bonds resumed in 1981. In 1984, corporate bonds and shares were issued in Shanghai and elsewhere. The Shanghai Stock Exchange, as it currently exists, was established on 26 November 1990 and officially began operations on 19 December of the same year. 

The 21st century and the development into a major financial centre

At the opening of the China International Import Expo (CIIE) on 5 November 2018, Chinese President Xi Jinping stated that “[China] will introduce a Science and Technology Innovation Board (‘SSE STAR Market’) and a pilot registration-based IPO system on the Shanghai Stock Exchange to support Shanghai’s efforts to become an international financial centre and a science and innovation hub, and strengthen the principles for the domestic capital market.” They have also outlined a viable way for the exchange to improve market functions, institutional framework and integration. 

The SSE STAR Market is designed to support scientific, technical and innovative companies that are in line with national strategies, have core and breakthrough technologies and enjoy a high degree of market recognition. The SSE STAR Market operates on a disclosure-oriented, registration-based IPO system. The Exchange was able to develop the key framework, procedures, rules and guidelines for the SSE STAR Market as well as the pilot system for registration-based IPOs in just four months under the guidance of the China Securities Regulatory Commission (CSRC) and with the support of the Shanghai Municipal Government.

The SSE STAR Market made its official debut on 13 June 2019 at the opening ceremony of the 11th Lujiazui Forum. And one of the major tasks of China’s capital market reform was successfully completed on 22 July 2019, when the first group of 25 companies were admitted to public trading. By the end of 2022, 501 companies with a market capitalisation of more than 6 trillion yuan (about €760 billion) were listed on the SSE STAR Market. 

Thus, the Shanghai Stock Exchange has developed into one of the most important stock exchanges worldwide and has long since ceased to limit its activities to China alone, but is internationally active.

The history of the Shanghai Stock Exchange

Beginnings of the Shanghai Stock Exchange in the 19th century 

The first city in mainland China where stocks, stock trading and stock exchanges originated was Shanghai. In Shanghai, stock trading began as early as the 1860s. An early form of stock exchange, the Shanghai Share Brokers Association, was established in 1891. Later in the 1920s, the city became the financial center of the Far East when the Shanghai Securities Goods Exchange and the Shanghai Chinese Securities Exchange were established. Foreign and Chinese investors could trade stocks, bonds and futures there. In 1946, the Shanghai Chinese Security Exchange was named Shanghai Securities Exchange Co. Later, in 1949, all securities transactions were closed. China’s reform and opening up and the development of the socialist market economy have expanded the Chinese securities market since 1980. Government bond offerings resumed in 1981. In 1984, corporate bonds and stocks were issued in Shanghai and other places. The Shanghai Stock Exchange, as it currently exists, was established on November 26, 1990, and officially began operations on December 19 of the same year. 

The 21st century and the development towards a major financial center

At the opening of the China International Import Expo (CIIE) on November 5, 2018, Chinese President Xi Jinping stated that “[China] will introduce a Science and Technology Innovation Board (‘SSE STAR Market’) and a pilot registration-based IPO system on the Shanghai Stock Exchange to support Shanghai’s efforts to become an international financial center and a science and innovation hub, and strengthen the principles for the domestic capital market.” They also outlined a viable way for the exchange to improve market functions, institutional framework and integration. The SSE STAR Market is designed to support scientific and technological and innovative enterprises that are in line with national strategies, have core and breakthrough technologies, and enjoy a high degree of market recognition. The SSE STAR Market operates under a disclosure-oriented, registration-based IPO system. The exchange was able to develop the key framework, procedures, rules and guidelines for the SSE STAR Market as well as the pilot system for registration-based IPOs in just four months under the guidance of the China Securities Regulatory Commission (CSRC) and with the support of the Shanghai Municipal Government. The SSE STAR Market made its official debut on June 13, 2019 at the opening ceremony of the 11th Lujiazui Forum. And one of the major tasks of China’s capital market reform was successfully completed on July 22, 2019, when the first group of 25 companies were admitted to public trading. By the end of 2022, 501 companies with a market capitalization of more than 6 trillion yuan (about 760 billion euros) were listed on the SSE STAR Market. 

Thus, the Shanghai Stock Exchange has become one of the most important stock exchanges in the world and has long since ceased to limit its activities to China alone, but is active internationally. 

Read on again for “Insights into the history of the financial world and its institutions”.