China Finance, Finance China
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Relevant and comprehensive China finance information is crucial for investing decisions. China’s economy is the second largest in the world in terms of GDP. The country achieved the distinction of being the fastest-growing major nation for 25 years between 1983 and 2008, recording double-digit annual GDP growth. Since the late 1970s, the country has been posting annual per capita income growth of more than 8%. China is posing stiff competition for other export-led economies in Asia after the government promoted the country as an export platform for multinational corporations.
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China Finance: Currency
China’s official currency is called the Renminbi (RMB). This currency can be issued by the People’s Bank of China and a few foreign exchange institutions. The RMB was pegged against the US dollar throughout the 1990s. Following continuous pressure from the US and the World Economic Council, the currency started getting pegged to a basket of foreign currencies in 2005.
China Finance: Stock Market
There are three stock exchanges operating independently in China, namely the Shanghai Stock Exchange (SSE), the Shenzhen Stock Exchange and the Hong Kong Stock Exchange (HKSE). While the SSE and the HKSE are completely open to foreign investors, tight capital account controls restrict foreign participation in the SSE. As of end-2007, 860 companies, with a combined market capitalization of US$3.7 trillion, were listed on the SSE.
Finance in China: Commodity Market
The commodities market in China is in the development stage. Before 1929, trading took place in the Shanghai Securities & Commodities Exchange and the Shanghai Chinese Merchant Exchange, which later merged into the Shanghai Stock Exchange. Thereafter, about 50 small commodity exchanges came into being, which were merged into 14 in 1995 and later just three in 1999.
As of 2008, the country had three commodity futures exchanges, namely the Dalian Commodity Exchange (DCE), the Zhengzhou Commodity Exchange (ZCE) and the Shanghai Futures Exchange. The nation’s three commodity futures exchanges generated a combined turnover of 40.97 trillion yuan in 2007. The use of commodity futures as a tool for hedging is rising rapidly.
