China market terminology explained | UBS United States of America (2024)

FAQs

What is the difference between US and China capital markets? ›

Chinese stock markets are much younger than those in the U.S. U.S. stock exchanges are larger than their Chinese counterparts. China's stock markets are not heavily connected to the economy at an individual and corporate level, whereas those in the U.S. are very connected.

China A-Shares vs. B-Shares. China A-shares are different from B-shares. A-shares are only quoted in RMB, while B-shares are quoted in foreign currencies, such as the U.S. dollar, and are more widely available to foreign investors.

H-shares of Chinese companies listed on the Hong Kong Stock Exchange are quoted and traded with a face value of Hong Kong dollars. H-shares are open for trading to all investors. A-shares are shares of companies based in mainland China that are listed on either the Shanghai or Shenzhen stock exchanges.

The TIC data suggest Chinese investors held $245 billion in equity securities and $24 billion in debt securities issued by US corporations, plus another $1.2 trillion in US government securities at the end of September 2020.

China Trade & Investment Summary

Exports were $195.5 billion; imports were $562.9 billion. The U.S. goods and services trade deficit with China was $367.4 billion in 2022. U.S. goods exports to China in 2022 were $154.0 billion, up 1.7 percent ($2.6 billion) from 2021 and up 39 percent from 2012.

United States is a sophisticated and highly diversified economy that is based on services, finance, and consumption from the middle class. China has similar aspirations in the future, but right now it is resource-intensive growth engine making the transition from a manufacturing hub to a consumer-driven economy.

Class B mutual fund shares are seen to be a good investment if investors have less cash and a longer time horizon. To avoid the exit fee, an investor should typically remain in the fund for five to eight years.

H-shares are shares of Chinese mainland companies that are listed on the Hong Kong Stock Exchange or other foreign exchanges. Although H-shares are regulated by Chinese law, they are denominated in Hong Kong dollars and are traded in the same way as other equities on the Hong Kong exchange.

P chips refer to shares of Chinese companies incorporated outside the mainland (mostly in Hong Kong) that trade on the Hong Kong Stock Exchange, and are owned by private sectors in China.

B shares were limited to foreign investment until 19 February 2001, when the China Securities Regulatory Commission began permitting the exchange of B shares via the secondary market to domestic citizens. This was widely seen as a landmark event to the integration of Chinese stock markets.

What are the two main stock exchanges in China? ›

The Shanghai Stock Exchange (Chinese: 上海证券交易所, SSE) is a stock exchange based in the city of Shanghai, China. It is one of the three stock exchanges operating independently in mainland China, the others being the Beijing Stock Exchange and the Shenzhen Stock Exchange.

The main types of business entities in China include State-Owned Enterprises (SOEs), Private Enterprises, Foreign-Invested Enterprises (FIEs), Limited Liability Companies (LLCs), Partnerships, and Sole Proprietorships.

Still, Chinese-owned land accounts for a tiny share of foreign-owned land in the United States. Chinese firms and investors own just over 383,934 acres in the U.S., less than the state of Rhode Island, and far less than how much Canada, Netherlands, Italy, the U.K. and Germany, in that order, each own.

The richest Americans own the vast majority of the US stock market, according to Fed data. The top 10% of Americans held 93% of all stocks, the highest level ever recorded. Meanwhile, the bottom 50% of Americans held just 1% of all stocks in the third quarter of 2023.

In 2021, of $506.4 billion in the U.S. imports from China, the top commodity sectors were Machinery and Mechanical Appliances (47.7% of total U.S. imports from China), Furniture, Bedding, Lamps, Toys, Games, Sport Equipment, Paint, and Other Miscellaneous Manufactured Items (13.5%), and Chemicals, Plastics, Rubber, and ...

Debt as a share of GDP has risen to about the same level as in the United States, while in dollar terms China's total debt ($47.5 trillion) is still markedly below that of the United States (close to $70 trillion). As for non-financial corporate debt, China's 28 percent share is the largest in the world.

Capital markets include the stock market and the bond market. They help people with ideas become entrepreneurs and help small businesses grow into big companies. They also give folks like you and me opportunities to save and invest for our futures.

Capital markets describe any exchange marketplace where financial securities and assets are bought and sold. Capital markets may include trading in bonds, derivatives, and commodities in addition to stocks. A stock market is a particular category of the capital market that only trades shares of corporations.