The History of the Chinese Stock Market: From Shanghai’s 1891 Brokers to the 6,124 Peak Nobody Has Beaten

China’s modern stock market is younger than most of the people trading it. The Shanghai Stock Exchange reopened on 19 December 1990 with eight stocks, after more than forty years with no stock market at all. Thirty-five years later, mainland China has more than 5,500 listed companies, about 250 million registered investors and a market worth around 119 trillion yuan – and its benchmark index has still never revisited the 6,124 it touched on 16 October 2007.

That last fact is the reason this story belongs on a trading site. Between 2007 and 2025 China’s economy grew roughly fivefold in nominal terms. Over the same years the Shanghai Composite fell. On 21 October 2026 it closed at 3,713, about 39% below its record. If Japan is the market that made investors wait 34 years, China is the live version of the same lesson: a booming economy and a rising stock index are two different trades.

This is the full history, from the foreign brokers of 1891 Shanghai to the state-managed swings of 2026, with real index data from TradingView behind every chart.

Chinese Stock Market History at a Glance

Date	Event	Why it mattered
1891	Shanghai Stock and Sharebrokers’ Association founded	China’s first stock market, run by foreign brokers
1949	Shanghai exchange closed after the revolution	Four decades with no stock market
Nov 1984	Shanghai Feilo issues shares to the public	The first public share issue of the reform era
19 Dec 1990	Shanghai Stock Exchange begins trading	Eight stocks; the index base of 100
1 Dec 1990	Shenzhen exchange begins trial trading	Formal opening followed on 3 July 1991
21 May 1992	Shanghai scraps daily price limits	The index doubles intraday
Aug 1992	Shenzhen share-subscription riot	More than a million people queue for lottery forms
Oct 1992	Securities regulators created	The CSRC is born out of the chaos
29 Jul 1994	Index closes at 333.92	Down about 79% from the February 1993 peak
23 Feb 1995	The “327” bond futures scandal	The exchange voids the last minutes of trading
16 Dec 1996	People’s Daily editorial; 10% daily limit	The state talks the market down
14 Jun 2001	Index peaks at 2,245.44	The start of a four-year bear market
11 Dec 2001	China joins the WTO	The economy takes off; the market keeps falling
29 Apr 2005	Split-share reform begins	Two-thirds of shares had been untradable
6 Jun 2005	Index breaks below 1,000	The bottom before the great mania
30 May 2007	Stamp duty tripled	A 6.5% one-day fall, then the final surge
16 Oct 2007	Intraday record of 6,124.04	Still the all-time high
28 Oct 2008	Intraday low of 1,664.93	72.8% below the peak
17 Nov 2014	Shanghai–Hong Kong Stock Connect opens	Foreign money gets a direct door
12 Jun 2015	Intraday peak of 5,178.19	The margin-fuelled bubble tops
8 Jul 2015	1,317 A shares suspended	Nearly half the market stops trading
24 Aug 2015	“Black Monday”: down 8.49%	The sell-off goes global
7 Jan 2016	Circuit breaker shuts the market in 29 minutes	The rule is scrapped the next day
1 Jun 2018	A shares enter MSCI indices	Global benchmarks start to own China
22 Jul 2019	STAR Market opens	Shanghai’s answer to the Nasdaq
24 Sep 2024	Central bank stimulus package	The index rises a third in two weeks
29 Oct 2025	First close above 4,000 in a decade	4,016.33
14 May 2026	Intraday high of 4,258.86	The highest since 2015, still 30% short of 6,124
Oct 2026	CSI 300 posts a record losing streak	The state steps in again

Before 1949: Shanghai’s First Stock Market

China had a stock market long before the Communist Party had one. In 1891 a group of British, American and French businessmen in Shanghai founded the Shanghai Stock and Sharebrokers’ Association to trade shares in the companies of the treaty port. In 1904 it took the name Shanghai Stock Exchange, and by the 1920s and 1930s Shanghai was one of Asia’s leading financial centres. The exchange merged with a Chinese rival in 1928, was suspended under Japanese occupation on 8 December 1941, reopened in 1946 and was shut for good in 1949. By November 1950 it had been liquidated.

For the next three decades there were no shares to trade. Under central planning, the state owned the enterprises, set the prices and allocated the capital. A stock market had no job to do.

1984–1990: A Share Certificate for Wall Street

That changed with Deng Xiaoping’s reforms. In November 1984 a small Shanghai electronics company, Feilo Acoustics, issued 10,000 shares at 50 yuan each to the public, raising 500,000 yuan. It is generally described as the first public share issue of the reform era. The shares changed hands informally and through a handful of bank counters for years before there was anywhere official to trade them.

In November 1986 Deng met John Phelan, then chairman of the New York Stock Exchange, in Beijing and handed him a single Feilo share certificate with a face value of 50 yuan. Phelan later travelled to Shanghai to have it registered in his own name. It was a small, deliberate signal: China intended to have capital markets, and it wanted the world to know.

The Shanghai Stock Exchange was formally established on 26 November 1990 and began trading on 19 December 1990 in the Peacock Hall of the old Astor House Hotel on the Bund. Eight stocks traded on day one – the “old eight” – among 30 securities in all, including bonds, traded through 25 member brokers. Total turnover was 494,000 yuan. The Shanghai Composite Index uses that day as its base, set at 100. In Shenzhen, next to Hong Kong, a second exchange began trial trading on 1 December 1990 and opened formally on 3 July 1991.

1992: Price Limits Off, a Riot in Shenzhen

The early market was tiny, illiquid and tightly fenced. Shanghai capped how far any stock could move in a day, and with only a handful of listings, demand vastly exceeded supply. On 21 May 1992 the exchange removed the daily price limits. The index opened around 617 and touched 1,266 during the session, a gain of about 105% in a single day. Within days it had reached 1,429. Six months later, in November 1992, it was at 387.

That August, Shenzhen produced the defining scene of China’s early stock-market fever. To allocate new share issues, the city sold 5 million subscription lottery forms at 100 yuan each, giving roughly a one-in-ten chance of the right to buy shares. More than a million people, many from other provinces, queued from 8 August at around 300 outlets – in a city of about 800,000 residents. The forms sold out within hours amid accusations that officials had kept them for themselves. On the evening of 10 August thousands of people who had missed out protested outside the municipal government offices, and police used tear gas and water hoses to disperse them. An investigation later found more than 4,000 officials had diverted about 100,000 forms.

The “8.10 incident” frightened Beijing into building a regulator. In October 1992 the State Council created a Securities Commission and, under it, the China Securities Regulatory Commission. The same year China launched B shares, a separate class of mainland shares priced in foreign currency for overseas investors; the first, Shanghai Vacuum Electron Device, listed on 21 February 1992. Chinese residents were not allowed into the B-share market until 2001.

1993–1996: Boom, Bust and the First Rescue

The pattern that would define the next thirty years arrived almost immediately. The index rebounded from 387 to 1,558 on 16 February 1993 – a 300% rise in three months – and then fell for seventeen months. By 29 July 1994 it had closed at 333.92, with an intraday low of 325.89. Seventy-nine per cent of its value had gone.

On 30 July 1994 regulators announced what became known as the “three policies to rescue the market”: a halt to new share listings for the rest of the year, strict limits on rights issues, and new routes for money to enter the market. The index went from 334 to 1,052.94 on 13 September 1994, a gain of more than 200% in about six weeks. It was the first time the state had openly rescued its stock market. It would not be the last.

Speculation spilled into every corner of the young system. On 23 February 1995, in the final minutes of trading in a government bond futures contract code-named “327”, Wanguo Securities, then one of the country’s largest brokers, defended a huge losing short position by flooding the market with sell orders, including a final order for 7.3 million contracts. The price collapsed. That night the Shanghai exchange voided every trade after 16:22:13. Wanguo was left with losses of about 5.6 billion yuan, its chairman Guan Jinsheng was arrested that May and later jailed for 17 years for bribery and embezzlement, and on 17 May 1995 regulators suspended bond futures trading altogether. On 1 January 1995 both exchanges had also abandoned same-day trading and moved back to T+1 settlement, which still applies to A shares today: a share bought today cannot be sold until tomorrow.

By late 1996 the market was booming again, and this time the state talked it down. On 16 December 1996 the People’s Daily, the Communist Party’s newspaper, ran a front-page editorial describing the rally as abnormal and irrational. The same day, a 10% daily price limit took effect. The index fell 9.9% that day, with almost every stock locked limit-down, hit the limit again the next day and ended the year at 917.

1996–2005: The Long Bull and the Four-Year Bear

From a low of about 513 in January 1996, the market climbed for five years. A sharp rally that began on 19 May 1999, still remembered in China as the “519” market, carried the index from roughly 1,047 to new highs, and on 14 June 2001 it reached 2,245.44. That was the peak for the next six years.

The problem was supply. Roughly two-thirds of all shares in listed Chinese companies were non-tradable: blocks held by the state and by state-linked “legal persons” that could not be sold on the exchange. In 2001 the government announced plans to start selling some of those state holdings. Investors realised that a wall of new supply could one day hit the market, and prices fell for four years. Beijing suspended the share-sale policy for new listings on 22 October 2001, but the overhang remained. Only a few weeks later, on 11 December 2001, China joined the World Trade Organization, and its economy entered the fastest sustained expansion in modern history. The stock market went the other way.

Foreign money was let in only through narrow, quota-controlled gates. The Qualified Foreign Institutional Investor (QFII) scheme took effect on 1 December 2002; UBS made the first QFII trade on 9 July 2003. By the middle of 2005 the index had fallen back below 1,000, touching 998.23 intraday on 6 June 2005. It had lost 56% while the economy boomed.

The fix was the split-share reform, launched on 29 April 2005 with four pilot companies. Holders of non-tradable shares had to compensate ordinary shareholders before their stakes could be floated – usually with free bonus shares, averaging about three for every ten tradable shares held – and each plan needed the approval of two-thirds of the tradable-share votes cast. It removed the overhang that had crushed the market since 2001, and lit the fuse for what came next.

2005–2007: The Mania That Built 6,124

From 998 in June 2005, the Shanghai Composite rose 513% in 28 months. The index gained 130% in 2006 and another 97% in 2007. Ordinary households, with bank deposit rates below inflation, a closed capital account and few other places to put their savings, poured in. The number of stock-trading accounts rose from 78.5 million at the end of 2006 to 138.9 million at the end of 2007: about 60 million in a single year.

The authorities tried to cool it. On the night of 29 May 2007 the Ministry of Finance announced that stamp duty on share trades would triple, from 0.1% to 0.3%, effective the next morning. On 30 May the index fell 6.5% to 4,053.09, and on 4 June it fell another 8.26%. It was a short pause. Within five months the market was 50% higher, and on 16 October 2007 the Shanghai Composite touched 6,124.04 intraday, closing at 6,092.06. The investors who bought last were buying a market priced as if nothing could go wrong.

2008: Two-Thirds Gone in a Year

The bubble burst before the global financial crisis arrived, and the crisis finished it. From 6,124.04 in October 2007 the index fell to an intraday low of 1,664.93 on 28 October 2008, a decline of 72.8% in twelve months. Its lowest close came on 4 November 2008, at 1,706.70. The calendar year 2008 ended 65.4% down: the worst year in the index’s history.

2009–2014: Stimulus, New Tools and a Market Going Nowhere

On 9 November 2008 China announced a 4 trillion yuan stimulus package, worth about $586 billion, to be spent over two years. Credit flooded the economy, and the stock market rallied 109% to 3,478.01 on 4 August 2009. Then it faded for four years, even as the economy kept growing fast.

Those years built most of the plumbing traders use today. ChiNext, Shenzhen’s growth-company board, opened on 30 October 2009 with 28 companies. A pilot for margin trading and short selling began on 31 March 2010 with six brokerages, and CSI 300 index futures started trading on the China Financial Futures Exchange on 16 April 2010. Each made the market more efficient, and each would later be blamed for making it more volatile.

In June 2013 a cash squeeze in China’s interbank market sent the overnight Shanghai Interbank Offered Rate to 13.44% on 20 June, from under 3% a month earlier. Stocks slid with it, and on 25 June 2013 the index touched 1,849.65 intraday – lower than it had been in more than four years, and 70% below the 2007 peak. Then, on 17 November 2014, the Shanghai–Hong Kong Stock Connect opened, letting international investors buy Shanghai shares through Hong Kong brokers for the first time, within a daily quota. By then a new rally had already begun.

2015: The Bubble Beijing Cheered

The 2014–2015 boom was different from earlier manias in one important way: the state openly encouraged it, and borrowed money powered it. Interest rates were cut, new investors flooded in, and margin debt – money borrowed from brokers to buy shares, plus a large and lightly regulated layer of informal margin lending outside the brokers – ballooned. Officially reported margin debt peaked at about 2.3 trillion yuan in mid-June 2015.

Official media joined in. On 21 April 2015, shortly after the index crossed 4,000, the People’s Daily published a commentary headlined to the effect that 4,000 points was only the start of the bull market. Seven weeks later, on 12 June 2015, the Shanghai Composite touched 5,178.19 intraday. It never got higher.

The collapse was fast. From the 12 June close to the 8 July close the index fell 32%. Margin calls forced selling, which triggered more margin calls. Companies began suspending trading in their own shares to escape the rout: on 8 July 2015, 1,317 of the market’s roughly 2,700 A shares were suspended, almost half of all listed companies. That same day the CSRC barred shareholders holding more than 5% of a company, along with directors and executives, from selling for six months. A group of state-backed institutions led by the China Securities Finance Corporation – quickly nicknamed the “national team” – was ordered to buy. Caixin reported that they bought at least 200 billion yuan of shares; Goldman Sachs estimated the full support effort at around $144 billion over June and July.

It held for a few weeks. Then, on 11 August 2015, the People’s Bank of China devalued the yuan by 1.9%, its biggest one-day move in two decades, and investors everywhere began to price a sharper Chinese slowdown. On Monday 24 August 2015 the Shanghai Composite fell 8.49% – state media called it “Black Monday” – and dragged global markets down with it. It lost another 7.6% the next day and bottomed at 2,850.71 on 26 August.

January 2016: The Circuit Breaker That Lasted Four Days

Regulators decided that what the market needed was a circuit breaker. From 4 January 2016, a 5% move in the CSI 300 index would halt trading for 15 minutes, and a 7% move would close the market for the rest of the day. On the first day of the new rule the market fell 5%, paused, reopened and fell to 7% within minutes. On 7 January it happened again, and this time the market closed after just 29 minutes of trading, the shortest session in its history.

The problem was obvious in hindsight. With a hard stop at 7%, a fall to 5% gave every trader a reason to sell before the door shut, which pushed the market towards 7%. The circuit breaker was suspended from 8 January 2016. The index kept falling and bottomed at 2,638.30 on 27 January 2016, 49% below the June 2015 peak. The 2015 crash is one of the episodes told in full in our Market Mayhem book.

2016–2024: Open Doors, Crackdowns and a Wide Range

For the next eight years the Shanghai Composite went sideways, mostly between about 2,500 and 3,700. Under the surface, three big things happened.

The doors opened wider. The Shenzhen–Hong Kong Stock Connect opened on 5 December 2016. On 1 June 2018 MSCI began including 226 large Chinese A shares in its global indices at a 2.5% weighting factor, raised to 20% in November 2019, which meant index funds around the world had to own them. The STAR Market, a Shanghai board for technology companies, opened on 22 July 2019 with 25 listings, and on 17 February 2023 registration-based IPOs were extended to the main boards.

Politics hit hard. The US–China trade war helped make 2018 a 24.6% loss for the index, the worst of any major market that year. On 3 November 2020 regulators halted Ant Group’s planned $34.5 billion listing two days before it was due to start trading. The index peaked at 3,731.69 on 18 February 2021, and in July 2021 new rules effectively banned for-profit tutoring, sinking listed education stocks. The property sector, the largest store of Chinese household wealth, began to unravel: Evergrande defaulted in 2021, and on 29 January 2024 a Hong Kong court ordered it liquidated with debts of around $300 billion.

The state became a permanent buyer. On 5 February 2024 the index touched 2,635.09, its lowest in years. The next day Central Huijin, the sovereign investment arm, announced it would expand its purchases of index funds, and on 7 February the head of the CSRC was replaced. Buying the market at the lows was no longer an emergency measure. It had become policy.

September 2024: The Fortnight Beijing Pressed the Button

On 24 September 2024 the People’s Bank of China announced a broad stimulus package: a 20-basis-point cut to its policy rate, a 50-basis-point cut to bank reserve requirements, a 500 billion yuan swap facility that let brokers, fund managers and insurers borrow against their holdings to buy shares, and a 300 billion yuan relending facility to finance share buybacks. These were new tools aimed directly at the stock market.

The market’s response was one of the sharpest rallies since the 1990s. From the 23 September close of 2,748.92, the index rose 21.4% in five sessions, including an 8.06% gain on 30 September. After the week-long National Day holiday, it opened on 8 October 2024 at 3,674.40, 33.7% above where it had started two weeks earlier. Turnover that day hit a record 3.45 trillion yuan. And that opening print was the high: the index closed the day at 3,489.78 and fell 6.62% on 9 October. Traders who bought the gap at the open were under water by the close.

2025–2026: Back Above 4,000, Still Below 6,124

The next leg was slower and better founded. In early 2025 the success of Chinese artificial-intelligence start-up DeepSeek set off a rally in Chinese technology shares. The global tariff shock hit on 7 April 2025, when the index fell 7.34% in one session to an intraday low of 3,040.69, but the recovery was quick. On 28 October 2025 the Shanghai Composite moved above 4,000 for the first time since August 2015, and on 29 October it closed above that level at 4,016.33. It finished 2025 up 18.4%.

The rally continued into 2026. On 6 January the index closed at 4,083.67, its highest since July 2015, and on 12 January daily turnover reached a new record of 3.6 trillion yuan. Artificial-intelligence and semiconductor shares led the charge. On 11 May the index closed at 4,225.02, the highest since June 2015, and on 14 May it touched 4,258.86 intraday. Margin debt climbed to a record 3.01 trillion yuan on 25 June 2026, higher than at the 2015 peak.

Then the familiar pattern reappeared. A global sell-off in chip shares in July 2026, with Chinese chipmakers trading on extreme valuations, knocked 3.03% off the index on 17 July, and state-backed funds stepped in to buy from 20 July. In October trade worries and a global technology sell-off pushed the index down again: on 15 October it closed at 3,707.48, the lowest since the summer of 2025, and the CSI 300 index of large Chinese companies recorded its longest weekly losing run on record. Regulators asked insurers to limit their selling and the national team to accelerate its buying. On 21 October 2026, the Shanghai Composite closed at 3,713.03: about 13% below the May high and 39% below the 2007 record.

Every Boom and Every Bust in One Table

China’s market does not trend. It lurches. The table below lists every major swing in the Shanghai Composite since 1990, measured from intraday high to intraday low, calculated from TradingView monthly data. Read down the Move column and the character of the market is obvious: six gains of 180% or more, and seven falls of 47% or worse.

Swing and index level	Move	Length
Dec 1990 → May 1992 96 → 1,429	+1,392%	17 months
May 1992 → Nov 1992 1,429 → 387	−73%	6 months
Nov 1992 → Feb 1993 387 → 1,559	+303%	3 months
Feb 1993 → Jul 1994 1,559 → 326	−79%	17 months
Jul 1994 → Sep 1994 326 → 1,052	+223%	2 months
Sep 1994 → Jan 1996 1,052 → 513	−51%	16 months
Jan 1996 → Jun 2001 513 → 2,245	+338%	65 months
Jun 2001 → Jun 2005 2,245 → 998	−56%	48 months
Jun 2005 → Oct 2007 998 → 6,124	+513%	28 months
Oct 2007 → Oct 2008 6,124 → 1,665	−73%	12 months
Oct 2008 → Aug 2009 1,665 → 3,478	+109%	10 months
Aug 2009 → Jun 2013 3,478 → 1,850	−47%	46 months
Jun 2013 → Jun 2015 1,850 → 5,178	+180%	24 months
Jun 2015 → Jan 2016 5,178 → 2,638	−49%	7 months
Jan 2016 → Feb 2021 2,638 → 3,732	+41%	61 months
Feb 2021 → Feb 2024 3,732 → 2,635	−29%	36 months
Feb 2024 → May 2026 2,635 → 4,259	+62%	27 months

Two things stand out. The rallies get shorter as the market matures, and the gap between booms and busts narrows: the 1990s swings were measured in hundreds of per cent; the 2016–2026 swings in tens. But the falls remain big enough to end a leveraged trader’s career several times over, and the state’s fingerprints are on nearly every turning point – the 1994 rescue, the 1996 editorial, the 2007 stamp duty, the 2015 cheerleading and rescue, the 2024 stimulus.

The Economy Is Not the Market: The Numbers

Here is the core fact of this story, set out as plainly as possible. China’s nominal GDP was 27.4 trillion yuan in 2007. In 2025 it was 140.2 trillion yuan, about 5.1 times larger; measured in US dollars, it grew from about $3.6 trillion to about $19.5 trillion. Over the same period, anyone who bought the Shanghai Composite at the end of October 2007 has lost about 38% of their money in price terms.

Why? There is no single answer, but four explanations carry most of the weight.

• The starting price. In October 2007 Chinese shares were priced as if spectacular growth was guaranteed and certain to flow to shareholders. When growth arrives exactly as forecast, an expensive stock can still go nowhere. Price paid is the first determinant of return.
• Growth does not automatically reach shareholders. Much of China’s growth was captured by the state, by banks, by local governments and by companies that never listed. Many listed firms, especially state-owned ones, have been run for policy goals as much as for profit.
• Dilution. Listed companies have raised enormous sums through IPOs, placements and rights issues, and the number of listed companies has more than tripled since 2007. Much of the money investors put in went to fund new supply rather than to lift the price of existing shares.
• Policy risk. Investors demand a discount for markets in which the rules can change overnight, an industry can be banned, and the state can decide who may sell.

The honest counterweight matters here, because the “China has gone nowhere” story is also a story about start dates. From its base of 100 in December 1990 to 3,713 today, the Shanghai Composite has risen about 37-fold, roughly 10.6% a year before dividends. Someone who bought at the June 2005 low of 998 has almost quadrupled their money. The market did not fail everyone. It failed the people who bought the mania, and it rewarded the people who bought the despair. That is a lesson about valuation and timing, not about China.

Every Year Since 1991

The year-by-year record tells the same story from a different angle. Between 1991 and 2025 the index rose in 20 years and fell in 15. That is not unusual. What is unusual is the size of the moves: a market that gained 130% in 2006 and 97% in 2007 gave back 65% in 2008. Over the decade from 2016 to 2025 the swings were milder, but seven of those ten years still moved more than 10% one way or the other. China rewards traders who can take both sides and punishes anyone who simply buys and hopes.

How China’s Stock Market Works Today

Mainland China now has three stock exchanges: Shanghai, Shenzhen and the much smaller Beijing Stock Exchange. At the end of June 2026 they listed 5,535 companies – 2,314 in Shanghai, 2,898 in Shenzhen and 323 in Beijing – with a combined market value of about 119 trillion yuan, roughly $17 trillion. That makes mainland China the second-largest equity market in the world after the United States.

Several rules make it behave differently from Western markets:

• Daily price limits. Main-board shares can move no more than 10% up or down in a day; STAR Market and ChiNext shares, 20%. Limits slow a crash but also trap traders on the wrong side, because a stock locked limit-down cannot be sold at any price.
• T+1 settlement. A-share investors cannot sell shares on the day they buy them, so a bad intraday entry has to be held overnight.
• Who trades. Individual investors still dominate. The CSRC reported that their share of trading value fell below 70% for the first time in 2021; in 2017 it was 82% on the Shanghai market. At the end of 2025 there were 250.67 million registered investors. A retail-dominated market trades on momentum and news flow, not discounted cash flows.
• The state. The national team, Central Huijin, state media and the regulator all act on the market. Selling bans, IPO pauses, guidance to institutions and direct buying are all part of the toolkit, and every serious trader of Chinese assets watches Beijing as closely as earnings.

For overseas investors, direct access to mainland shares runs mainly through Stock Connect and the QFII scheme. Most retail traders use something simpler: FTSE China A50 index CFDs or the SGX FTSE China A50 futures contract, launched in Singapore on 5 September 2006; China-focused ETFs; or Hong Kong’s Hang Seng index and Hong Kong-listed shares.

How to Trade Chinese Markets

The China A50, the Hang Seng and China ETFs give very different exposures. The A50 tracks 50 of the largest mainland A shares and trades nearly around the clock through derivatives; the Hang Seng covers Hong Kong-listed companies, including many Chinese technology giants that are not in mainland indices at all. Whichever you choose, the history above sets the risk rules. Policy headlines can move these markets 5% overnight, so define your stop before you enter, size every position so a gap through that stop does not cripple the account, and never risk more than 1% of capital on one trade. Our risk management guide sets out the full framework.

Ten Lessons From China’s Market

1. The economy is not the market. China’s GDP grew about fivefold after 2007 while its main index fell. You can be right about the macro story and still lose money for two decades.
2. The price you pay decides the return. Buyers at 998 in 2005 nearly quadrupled their money. Buyers at 6,124 in 2007 are still under water. Same market, different entry.
3. “It always comes back” is a hope, not a plan. Nineteen years is longer than most trading careers. Only position sizing lets you survive being early or wrong.
4. Leverage sets the speed of the crash. 2015 went from peak to a third down in under four weeks because so much of the buying was borrowed.
5. Know who you are trading against. A market of hundreds of millions of individuals moves in herds. Momentum works until it violently does not.
6. Policy is a price driver. In China a Beijing announcement can move the market more than any earnings season. Treat policy events like a data release: know when they are due, and size down.
7. State support changes the shape of the move, not the direction forever. Rescues in 1994, 2015 and 2024 produced spectacular rallies. None of them took the index to a new high.
8. Rule changes create their own crashes. The 2016 circuit breaker made selling worse. When a market’s rules change mid-crisis, step back until you understand the new ones.
9. Gaps are real risk. 8 October 2024 opened 34% above the pre-stimulus close and that was the high. A stop does not protect you from a price you were never offered.
10. Survival comes before profit. From a buttonwood tree in New York to a banyan tree in Bombay to a hotel ballroom in Shanghai, this series keeps arriving at the same place: the crowd runs on fear and greed, and the trader who stays solvent is the one who gets to trade the next cycle.

Trade it with a repeatable method, firm risk control and a disciplined mind: Mind, Method and Money. For the other chapters of this series, read the histories of the US stock market, the Indian stock market, the London Stock Exchange and gold.

Frequently Asked Questions

When did the Chinese stock market start?

Shanghai had a stock exchange from 1891, founded by foreign brokers, until it closed in 1949. The modern market dates from the reform era: the first public share issue was by Shanghai Feilo in November 1984, the Shenzhen exchange began trial trading on 1 December 1990, and the Shanghai Stock Exchange began trading on 19 December 1990 with eight stocks.

What is the Shanghai Composite’s all-time high?

The intraday record is 6,124.04, set on 16 October 2007; the record close is 6,092.06, set the same day. The highest level since then was 5,178.19 in June 2015. The 2026 high was 4,258.86 on 14 May.

Why hasn’t the Shanghai index recovered its 2007 high?

Because it started from an extreme valuation, because much of China’s economic growth has not flowed through to listed-company shareholders, because constant new share issuance has diluted existing holders, and because investors demand a discount for policy risk. China’s nominal GDP grew about fivefold from 2007 to 2025, but on 21 October 2026 the index was still about 39% below its record.

What caused the 2015 Chinese stock market crash?

A rally encouraged by official media and powered by borrowed money pushed the Shanghai Composite to 5,178.19 on 12 June 2015, with officially reported margin debt peaking at about 2.3 trillion yuan. When prices turned, margin calls forced selling. The index fell 32% close to close in under four weeks, 1,317 companies suspended their shares on 8 July, and a yuan devaluation on 11 August set up the 8.49% fall of 24 August, “Black Monday”.

What is China’s “national team”?

The nickname for the group of state-backed institutions, including the China Securities Finance Corporation and the sovereign fund Central Huijin, that buy shares to support the market. It was formed during the 2015 crash and has been used repeatedly since, including in February 2024, July 2026 and October 2026.

What are A shares, B shares and H shares?

A shares are mainland-listed shares priced in yuan, traded in Shanghai, Shenzhen and Beijing. B shares are a small, older class of mainland shares priced in US or Hong Kong dollars, created in 1992 for foreign investors. H shares are mainland companies listed in Hong Kong and priced in Hong Kong dollars, open to international investors.

Can foreigners invest in Chinese stocks?

Yes, with restrictions. International investors can buy many Shanghai and Shenzhen shares through Stock Connect via Hong Kong, and institutions can use the QFII scheme. Most individual investors outside China use China ETFs, Hong Kong-listed shares, or China A50 index CFDs and futures instead.

How can I trade Chinese markets?

Most retail traders use a China A50 index CFD or futures contract, a Hang Seng index CFD, or China and Hong Kong ETFs, rather than buying mainland shares directly. Check which symbols your broker or prop firm offers and when they trade, size positions for overnight gaps and policy announcements, and risk no more than 1% of capital on a single trade.

Sources and Further Reading