‘To Get Rich is Glorious!’
In October 1992 a Chinese automobile company completed the initial public offering (IPO) of its shares on the New York Stock Exchange, becoming the first Chinese company in history to list on an international market. Wholly unexpected and wildly received by investors, this small transaction dramatically focused global attention on events unfolding in China. Although only US$80 million, this IPO marked the emergence of China on the global capital markets. Its domestic impact was even larger, however, since it presaged massive changes in the operating environment of China’s state-owned industrial sector. These changes were driven by new State policies which promoted corporate structures limited by shares wherein the shares themselves could be sold to non-state investors and listed and traded on domestic and international stock exchanges. Although the Chinese Premier at the time believed such changes represented little more than the traditional joint venture (‘JV’) financings, the revival of domestic stock exchanges and the listing of Chinese companies internationally symbolized a dramatic and highly visible break with past political and economic arrangements and was recognized as such by Chinese and non-Chinese alike. The 1990s have since witnessed the elaboration of this policy line to the point that the demands and requirements of the securities markets have become a major influence on State economic policy.
KeywordsInitial Public Offering Security Market Security Exchange Equity Share York Stock Exchange
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- 1.See, for example, Li Changjiang, The History and Development of China’s Securities Markets, ( Beijing: Zhongguo wuzi chubanshe, 1998 ), p. 86.Google Scholar