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Shanghai Stock Exchange

The Shanghai Stock Exchange (SSE) is the pre-eminent stock market in mainland China. The nonprofit organization is among the world's 10 largest exchanges.

Expanded Definition

Investors have to pay attention to the Shanghai Stock Exchange because many see China as one of the best places to find growth stocks, partly because of its increasing middle class. In the U.S., the Dow Jones Industrial Average is the "market;" in China, it's the Shanghai Stock Exchange.

Located on China's east coast, at the mouth of the Yangtze River, Shanghai has long been a key trading port for China. It makes sense that this city would become home to China's growing market interaction with the rest of the world, which the country, for many centuries, kept at bay.

SSE evolved from earlier markets and was founded Nov. 26, 1990. It opened for trading less than a month later, about six-and-a-half years before China welcomed Hong Kong back from British rule.

At the end of 2006 (the latest year for which information was available on the SSE website), the Shanghai Stock Exchange had some 880 listings and more than 41 million trading accounts.

It ranks along with the Hong Kong Stock Exchange and the Tokyo Stock Exchange as Asia's three largest stock exchanges.

The SSE is governed by the China Securities Regulatory Commission, a government agency set up to protect investors, similar to the Securities and Exchange Commission in the United States.

The SSE is a paperless stock market with buy and sell orders matched by computers. The Shanghai exchange's memberships include the International Organization of Securities Commissions and the World Federation of Exchanges. It has memoranda of understanding with stock exchanges across the globe.

There are two classes of shares traded on the SSE: A shares are quoted in renminbi Chinese currency and B shares are quoted in U.S. dollars. Foreign investors can buy shares on the SSE.

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