2014 farewell

Cheming Yang

2014 is going into history. It is hard to predict but certainly much easier to reflect. What have we achieved in 2014?

The Xin Hua news agency has picked the ten biggest financial and economic news of the years as follows: the restart of IPO in China and the launch of the Shanghai-Hong Kong Stock Connect; the loosening of restriction on real estate transaction and housing mortage; the continuous falling of oil prices and the increase of consumption tax for oil; the imposition of biggest anti-monopoly sanctions; the tax reform triggered by the amendment of Budget Act; Alibaba’s IPO; the State Council’s regulatory opinions on local government’s debts; the People’s Bank of China lowering interest rates; A shares trading over 1 trillion RMBs; and the first batch of private banks permitted to operate.
According to Xin Hua, these events are listed chronologically, not in terms of importance or visibility. We can see there are at least three news that directly have to do with stock market.
Most companies listed on Chinese stock exchanges offer two share classes: A shares and B shares. B-shares are quoted in foreign currencies and are open to both domestic and foreign investment, while A-shares are only quoted in RMB. A shares are generally only available for purchase by mainland citizens. A shares experienced explosive growth in the 2005-2007 period as restrictions slowly began to peel away. Then it hit a very long slump. Starting from the September of this year, China enjoyed a bullish stock maket. Single day trading records have been broken constantly. On the 8th of December, the Shanghai Stock Exchange composite index once again stood on 3,000 after 44 months.
As 2014 is winding down, we see the rise of capital market and the fall of oil and housing markets in general. In theory, this means that the economy is boding well and ordinary poeple are going to have more money at their disposal. So if we have not done anything right, at least we have not done anything terribly wrong in 2014. While we are biding farewell to 2014, let’s hope we are entering an even better year.

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