Policy Market – Talking About Where the Chinese Stock Market Is Heading

Author: Shui Pi
Publisher:
Publishing Date: Not available
Features: Over 100 securities firms, more than 1,300 listed companies. 300 billion yuan in funds, over 70 million investors, 4 trillion yuan in market capitalization. The Chinese securities market has grown from nothing to something at an astonishing speed, leaving Wall Street in awe. However, the problems that have emerged have also left Wall Street baffled. Is the Chinese stock market a gambling den? Is there a bubble? Should state-owned shares be reduced? Should full liquidity be compensated? Does the Chinese stock market have value or is it being marginalized? Is the "Million Point Theory" valid? Will the market be overturned? Does the ChiNext have meaning? Is the valuation theory relevant? Can the "Nine National Policies" be implemented? Does the management have the ability? Since the Shanghai Composite Index peaked at 2,245 in 2001, discussions about the future of the Chinese stock market have never stopped. The Chinese stock market is a unique capital market built on a public ownership system dominated by state-owned enterprises. The economic form of this market is the split share structure, while the political core is centralized control. Therefore, any attempt to blindly copy Wall Street's governance model is bound to be dogmatic, aimless, and lead to a dead end. As a result, "marketization" has turned into "degradation," and "internationalization" has become superficial. Shi Meilun became a scapegoat, and returnees became scapegoats. Stock investment became a high-risk industry, and the securities market became a place that most investors despised.
On July 1, 1921, the Communist Party of China was founded. Seventy years later, in August 1991, the China Securities Association was established. In January 1935, the Zunyi Conference, a turning point in the history of the Chinese revolution, was held. Seventy years later, in January 2005, the Chinese stock market, like the Chinese revolution at the time of the Zunyi Conference, fell into its lowest point in history. From 1921 to 1935, the Chinese revolution took 14 years to find a path where Marxism was combined with the practice of the Chinese revolution. From 1991 to 2005, it was also 14 years. Can the Chinese stock market find its new historical direction? It was easy to expel Li De, but it was difficult to find Mao Zedong; it was easy to criticize returnees, but it was difficult to establish new thinking; it was easy to attack the China Securities Regulatory Commission, but it was difficult to build a new institution. Policy is our life, and strategy is equally our life. "Big Talk Policy Market" includes more than 100 selected essays from Shui Pi's 400+ reviews since 2001, divided into four parts: Big Truths, Big Errors, Big Wisdom, and Big Confusions.
What are the Big Truths? The truth, or "" (pattern), refers to the resolution of contradictions. Whether it's the "Nine National Policies" or "rescuing the market," they address the "contradictions" of the Chinese stock market, thereby seeking a bright "future" for it. What are the Big Errors? The error, or "" (mistake), refers to failures. "Popping the bubble" led to the "Million Point Theory," with the index being pushed down, but the market did not restart. Instead, an ugly "enterprise board" emerged. The fact that this board was born so stubbornly shows that the power of interest groups has exceeded people's imagination. What are the Big Wisdoms? The wisdom, or "" (wisdom), refers to great wisdom. The split share structure is a feature of the Chinese market and a difference between the Chinese and U.S. markets. To resolve the "privatization" of state-owned shares, to allow legal person shares to roll into "C-shares," and to eventually achieve "full liquidity," we need time and the great wisdom that this generation lacks. What are the Big Confusions? The confusion, or "" (confusion), refers to doubts. Why is the new "IPO" policy not recognized? Why is "institution building" so difficult? Is Shang Fulin effective or ineffective? Are economists playing the role of conscientious public intellectuals or capital representatives who seek profit? The facts tell us that the stock market is filled with struggles for fame and fortune. What one thinks may not be what one says, what one says may not be what one does, and what one does may not bear fruit. Everyone worries about the outcome, but Sa Pu worries about the (predicament). Where is the "policy market" headed? It concerns every investor and every Chinese person.