Source: CCTV.com

12-15-2008 14:08

In 1988, when the American investment expert Jim Rogers came to Shanghai and bought a few Chinese stocks in a small outlet of ICBC the Shanghai Stock Exchange still hadn't opened. In fact, it would be another 2 years until it existed. Needless to say, few of the over 1-billion Chinese knew much about stock investment.

Beijing's Jinrong (equals to finance in English) Street.

No one knows that early time better than Millionaire Yang. He is one of the earliest individual investors in China. His original name was Yang Huaiding. People began to call him Millionaire Yang after he earned the first million-yuan-asset through stock investment during 1980s. At that time of poverty and shortage, a family with 10 thousand yuan was already considered wealthy. At first Yang was worried what people thought about his way of making money because using one's hands to earn money was thought to be honorable. He was even afraid to put into jail. Market investment was considered speculation and capitalism. But the words of Deng Xiaoping, the chief designer of China's reform and opening up reassured him.

Yang Huaiding, one individual investor said "When Deng Xiaping completed his southern China tour and travelled to Shanghai, he said the securities market does not belong to capitalism or socialism. We should give it a try first and if it failed, we could close it then. But we should develop it first. Now 20 years passed, and how things have changed!"

Such a change of mind was the turning point. Since then, China's securities market has been growing at a rapid clip. China has established two stock exchanges in Shanghai and Shenzhen. There are already more than 1500 companies listed on the two stock exchanges. People with more disposable income are also taking an increasingly active part in stock investment. By October 2008, figures show accounts in the Shanghai and Shenzhen Stock markets reached 121 million. In fact, investment has become a very common activity and commonly discussed among Chinese people. Millionaire Yang tells us investors are also growing more mature with the development of the securities market.

Yang Huaiding said "It's the platform for raising capital, and investing. We cannot judge the success of the market according to the fall and rise of our shares. The securities market cannot ensure everyone makes money. However, it provides equal opportunity. If you seize the opportunity, you can grow along with the reform and opening up process."

The reform of the securities market is only one part of China's financial system reform. When we trace its history what's even more amazing is the banking reform.

Banks are considered the core of the nation's financial system. As a result, its reform was given high priority. In 1979, Deng Xiaoping proposed to develop banks as the leverage of economic development and technology innovation, and to make banks real banks.