Stock Exchanges
Shanghai Composite and Shenzhen: the two pillars of China’s A-share market
An introduction to China’s domestic equity market: the Shanghai and Shenzhen exchanges, the CSI 300 index, and how Stock Connect opens access to A-shares.
China’s domestic equity market is one of the largest in the world by capital raised, and it runs on two exchanges: the Shanghai Stock Exchange and the Shenzhen Stock Exchange. Understanding the difference is essential when reading Chinese market headlines.
The Shanghai exchange hosts mostly large, state-linked companies, banks and heavy industry. Its headline index, the Shanghai Composite, is the figure most often quoted, and it moves closely with financials and large industrial leaders.
The Shenzhen exchange skews towards smaller growth companies, including many in technology and consumer sectors. The most broadly followed benchmark, the CSI 300, spans the largest 300 A-shares across both venues and offsets the bias of any single exchange.
Overseas investors can access A-shares through the Stock Connect channel or qualified-investor quotas (QFII/RQFII). Settlement is in Chinese Yuan (CNY), so currency movement is part of the total foreign-return picture.
Key facts
- A-shares vs H-shares: Domestic mainland shares (A) trade separately from Hong Kong H-shares.
- CSI 300: The usual international benchmark across the two mainland exchanges.
- Stock Connect: The channel that lets investors trade A-shares and HK shares in both directions.
- Volatility: Mainland indices can move sharply on policy and retail-driven flows.
Frequently asked questions
Shanghai or Shenzhen — which index should I follow?
For broad exposure track the CSI 300. The Shanghai Composite is the most quoted, but it is weighted toward large financials.
How do foreign investors buy A-shares?
Usually via Stock Connect or a QFII licence, both of which are regulated and can change over time.