China A-Shares vs. B-Shares: Differences and History of China's Mainland Stock Exchanges

China A-Shares vs. B-Shares: Differences and History of China's Mainland Stock Exchanges
Posted on 01-06-2023

"China A-Shares vs. B-Shares: Understanding the Differences and History of China's Mainland Stock Exchanges"

China A-Shares and B-Shares are two types of stocks that are traded on the Chinese mainland stock exchanges. Here's a breakdown of their definitions, histories, and the differences between them:


  1. China A-Shares: A-Shares refer to shares of companies that are incorporated in mainland China and denominated in Chinese yuan (CNY). They are traded on the Shanghai Stock Exchange (SSE) and the Shenzhen Stock Exchange (SZSE), which are the two primary stock exchanges in China. A-Shares are primarily available to domestic Chinese investors, but there are also channels for qualified foreign institutional investors (QFIIs) and other approved foreign investors to trade in this market.

  2. China B-Shares: B-Shares, on the other hand, are shares of companies incorporated in mainland China but denominated in foreign currency, typically either US dollars (USD) or Hong Kong dollars (HKD). They are traded on the Shanghai Stock Exchange and the Shenzhen Stock Exchange as well, but they were primarily created to allow foreign investors to participate in the Chinese stock market. B-Shares are open to both domestic and foreign investors.

History: The creation of A-Shares and B-Shares in China dates back to the early 1990s when China was gradually opening up its economy to foreign investment. A-Shares were introduced in 1990, and initially, they were only available to Chinese citizens. The establishment of the Shanghai Stock Exchange and the Shenzhen Stock Exchange facilitated the trading of A-Shares.

In 1992, China introduced B-Shares to attract foreign investment. These shares were denominated in foreign currencies, making them accessible to foreign investors. B-Shares were initially listed in Shanghai and later in Shenzhen. In recent years, however, the popularity and trading volumes of B-Shares have declined significantly, and the Shanghai Stock Exchange suspended the listing of new B-Shares in 2001.


  1. Currency Denomination: The primary difference between A-Shares and B-Shares is the currency denomination. A-Shares are denominated in Chinese yuan (CNY), while B-Shares are denominated in foreign currency (typically USD or HKD).

  2. Investor Access: A-Shares were primarily designed for domestic Chinese investors, although foreign institutional investors can access this market through certain channels, such as the Qualified Foreign Institutional Investor (QFII) program or the Stock Connect programs (Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect). B-Shares, on the other hand, were initially created for foreign investors, but they are also open to domestic Chinese investors.

  3. Trading Restrictions: A-Shares are subject to certain trading restrictions and regulations imposed by the Chinese government, such as daily price limits and circuit breakers. B-Shares, on the other hand, have fewer trading restrictions compared to A-Shares.

  4. Liquidity and Trading Volume: Historically, A-Shares have been more liquid and have higher trading volumes compared to B-Shares. A-Shares are more influenced by domestic investors and market dynamics, while B-Shares are often affected by the sentiments of foreign investors.

It's worth noting that in recent years, China has taken steps to increase the accessibility of its A-Shares market to foreign investors, and the distinction between A-Shares and B-Shares has become less relevant. Additionally, other investment channels like the Hong Kong Stock Connect programs have provided foreign investors with more opportunities to invest in Chinese A-Shares.

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