Introduction to the Experiences and Challenges in the Development of the Chinese Capital Market

Following the recent financial crisis and ongoing decline experienced by developed economies, the weight of global economic growth is shifting increasingly toward emerging economies. China is widely recognized as playing a leading role in spearheading this shift of economic power. Indeed, China, an increasingly influential emerging economy, is currently attracting worldwide attention from academics, business practitioners, policy makers, and also from the more mainstream media. According to the analyses of IHS Global Insight, which is the world’s leading provider of economic research and intelligence, in 2010 China overtook the United States to become the largest manufacturing nation.1 Based on the forecast of Pricewaterhouse Coopers (2011), China has the potential to surpass the United States, and become the world’s largest economy by 2020.2 China’s growth has lifted millions of people out of poverty and has been hailed as one of the most important economic achievements in modern times. After three decades of transitioning from a centrally planned to a market-oriented economy, and as China’s rise in prominence becomes ever more visible on the global stage, the importance of China’s capital markets in this development process will only intensify.