Chinese B Shares in Shanghai and Shenzhen

INTRODUCTION

China’s B Share Market

Chinese B Shares are stocks initially designated for foreign investors. They are denominated in Renminbi, the Chinese local currency, and payable in foreign currency. B Shares listed in Shanghai Stock Exchange are listed in US dollars, while B Shares listed in Shenzhen Stock Exchange are listed in Hong Kong dollars.

In the past, only foreigners were allowed to trade B shares. Starting from March 2001, mainlanders can trade B shares in US dollars or Hong Kong dollars as well. When this news broke out in the beginning of 2001, Chinese B share prices went up dramatically, with many of the shares increased 8 fold in a few weeks.

Since then, as you can see from the following graph, many of the share prices dropped back to where they were in the beginning of 2001.

Investing in B Shares Listed in Shanghai Stock Exchange

Investing in B Shares Listed in Shenzhen Stock Exchange
 

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