SUDDENLY THE STOCK MARKET IS OK
The official text published by the normally staid official New China News Agency read liek a broker's blurb. Yanzhong Photocopy Company's subsidiary went public in 1985 amid scenes of wild enthusiasm in Shanghai. Within seven hours of its shares being issued, 60% had been snapped up. The flotation was spectacularly successful, raising RMB5 million for new equipment and industrial premises.
But the best news came this year: with gross profits for 1985 of just under RMB1 billion, a 15% dividend had been declared.
With pardonable hyperbole, the agency claimed that shareholders "would receive the first dividend cheques since 1949" when the Chinese Communist Party came to power. In fact, a number of other companies have gone public -- 10 in Shanghai alone since the law was changed in 1984 to permit share and bond flotations to the public.
The southern province of Guangdong boasts of even more spectacular success than Shanghai in raising share capital, as well it might with go-go Hong Kong's share markets just across the border to learn from. In the countryside, peasants have been avid for shares in a host of ventures, ranging from local factories to commercial enterprises.