Menu
Home
Log in / Register
 
Home arrow Economics arrow Chinese securities companies
< Prev   CONTENTS   Next >

THE BIRTH AND GROWTH OF CHINESE SECURITIES COMPANIES—A BRIEF HISTORY

As a key intermediary and participant in China's capital market, securities companies are closely linked to the formation of the Chinese capital market. The internal demands for reformed investing and financing systems, diversified financing channels, optimized capital portfolio, and an established financial market appeared as the planned economic system was loosened. At the same time, companies and individuals became more recognized as key market entities in the market economy and the national model of resource allocation, characteristic of the period of planned economy, collapsed. All these changes were made possible by the structural reform of the country's economy, which was a forceful and underlined institutional innovation. With these internal demands,[1] the securities market appeared to further the shareholding reform for companies, diversifying the financing channels and optimizing the capital portfolio. It also introduced more investment channels and products to the public. Before securities companies emerged as specialized security organizations, securities were being traded in trust and investment companies—firms that are not specialized in securities.

A review of the 20-year history of Chinese securities companies, as well as the economic and social development, financial system reform, securities market development, and supervision system evolution of the securities industry, reveals the following four major phases in the development of Chinese securities companies:

1. The preliminary phase

2. The fast-developing phase

3. The rectification phase

4. The normalized development phase

  • [1] In particular, the 12th CPC Central Committee adopted in the third plenary session in 1984 the Decision on Economic Reform, which further pushed the economic reform in cities and the countryside. Faced with increasing capital flows and a rapid demand for funds, and under great pressure of capital supply, Chinese banking had an urgent need for a diversified means of finance to gather idle money for the purpose of huge, long-term investment. Such a need was the initial contributing factor for the emergence of the Chinese securities market.
 
Found a mistake? Please highlight the word and press Shift + Enter  
< Prev   CONTENTS   Next >
 
Subjects
Accounting
Business & Finance
Communication
Computer Science
Economics
Education
Engineering
Environment
Geography
Health
History
Language & Literature
Law
Management
Marketing
Philosophy
Political science
Psychology
Religion
Sociology
Travel