Marshall faculty member Baizhu Chen paints a vivid portrait of the Shanghai Stock Exchange--where it's come from, where it is now and where it's headed.

Illustration by Diane Chang

On December 19, 1990, the sound of a drum played by a young man marked the opening of the Shanghai Stock Exchange in an old building on the Huangpu River. This sent a strong signal to the world that China had started to move into a new era--and, at the same time, had set the clock back 40 years.

The Past
Forty years ago, Shanghai had the largest stock exchange in Asia. Traders, investors and speculators came to Shanghai to make or lose fortunes. At that time, the floors in Hong Kong and Singapore were no comparison to the Shanghai Stock Exchange.     

After the new China was established in 1949, many things associated with the old system, including the stock exchanges, were abolished. The stock market was labeled a symbol of capitalism. People trading in the stock market were called speculators, and speculators were enemies of the people. According to the doctrine of the Communist ideology, stock market speculations were not productive activities. During the 40 years after the Shanghai Stock Exchange was closed, young people learned about the stock market from reading novels in which mean capitalists and corrupted Generalissimo Chiang Kei-Shek speculated in the Shanghai Stock Exchange. Only the older generation could still remember those exciting days of bulls and bears.    

When the Shanghai Stock Exchange was re-opened, many citizens remained on the sideline, anxiously watching as those who dared to play the market in the beginning made tremendous fortunes. Many had doubts the government would allow those who made money keep their fortune. But, as more and more Zhangs and Wangs became wealthy, more people joined in.

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