China’s stock exchanges and ‘Millionaire Yang’ mark 30 years of pride, fascination with Communist-style capitalism

Yang Huaiding was an unknown 40-year-old warehouse keeper at a Shanghai steel factory earning 51 yuan (US$7.80) a month in 1990. Today, he is fondly known as “Millionaire Yang” in the folklore of China’s stock market.

The Shanghai native made his first million from dabbling in the initial batch of eight stocks soon after the local bourse came into operation in December of that year, prompting him to devote himself to full-time trading.

“You could say the stock market offered me a new career path,” said Yang, who at 70 has experienced at least three boom-and-bust cycles – the 1997 Asian financial crisis, the 2008 Lehman Brothers collapse, and the 2015 domestic market crash. “Those hefty profits in the early days inspired me to make the switch.”

The birth of China’s stock market 30 years ago is a source of pride and fascination for the nation and its participants. At US$10.6 trillion, the market capitalisation has grown from scratch to become the world’s second largest in that span, behind the US whose history on Wall Street dates back to May 1792. Yang’s rags-to-riches tale is also an inspiration to 175 million individual investors who dream of landing the same windfall.

China’s experiment with the stock market came late in 1990, when the Shenzhen stock exchange came into operation on December 1 and Shanghai got its own 18 days later. It was a mechanism to convert abundant household savings into cheap capital, more often than not for cash-strapped state-owned factories on the verge of bankruptcy.

Shanghai, the birthplace of banking group HSBC Holdings and insurer AIG Group, was given the nod over Beijing for political reasons. The capital was still reeling from the student-led demonstrations that preceded the Tiananmen Square crackdown in June 1989.