Key terms from the world of Chinese investments explained in plain English.
Stocks of Chinese companies listed on mainland Chinese exchanges (Shanghai SSE and Shenzhen SZSE), traded in Chinese yuan (CNY/RMB). Historically primarily accessible to Chinese residents, but now also available to foreign investors through the Stock Connect program. A-shares are subject to Chinese regulations and accounting standards. They often trade at a premium or discount compared to their H-share equivalents listed in Hong Kong.
An American depositary receipt — a security traded on US exchanges that represents shares of a foreign company. Many Chinese companies (e.g. Alibaba, JD.com, Baidu) are listed in the USA as ADRs. This allows American and European investors to easily buy Chinese stocks without needing direct access to Chinese exchanges. ADRs are denominated in US dollars and trade on NYSE or NASDAQ.
A period of declining stock prices by 20% or more from a recent peak. In the Chinese context, there was a significant bear market in 2021–2022 when the Chinese government introduced strict regulations on the technology sector. The Chinese SSE Composite Index lost more than 30% of its value during that period.
A period of rising stock prices, typically 20% or more from a recent low. Characterized by investor optimism and a strong economy. On Chinese markets, a notable bull market occurred in 2015, when the Shanghai index rose more than 100% in less than a year, followed by a sharp crash.
A financial derivative that allows you to speculate on the price movement of an underlying asset (stocks, index, commodity) without actually owning it. CFDs allow leveraged trading but carry high risk of loss. According to ESMA, more than 70% of retail investors lose money when trading CFDs. For Chinese assets, CFDs are popular as a tool for short-term speculation.
A Nasdaq-style growth enterprise market on the Shenzhen Stock Exchange (SZSE), launched in 2009. ChiNext focuses on innovative and high-growth companies, particularly in technology, biotech, and clean energy sectors. It is often considered the barometer of China's technology startup ecosystem. The ChiNext Index tracks the performance of the 100 largest companies listed on this board.
The international currency code for the Chinese renminbi when trading on mainland China. CNY (Chinese Yuan) is the official designation for the yuan traded in continental China, where it is subject to control by the Chinese central bank (PBOC). It differs from CNH — the offshore version of the yuan traded in Hong Kong, which moves more freely. On yuan.cz we track the CNY rate against the Czech koruna (CZK).
A stock market index that tracks the performance of the top 300 stocks traded on the Shanghai and Shenzhen Stock Exchanges. It is considered the benchmark index for mainland Chinese equities, similar to the S&P 500 for the US market. The CSI 300 covers approximately 60% of the total market capitalization of both exchanges and includes A-shares from diverse sectors including financials, technology, consumer goods, and industrials.
Bonds denominated in Chinese yuan (renminbi) issued outside mainland China — typically in Hong Kong. The name comes from the popular Chinese cuisine. They allow foreign investors to invest in CNH without the restrictions imposed by the Chinese government on direct investments in mainland China. They are popular as a diversification tool and for currency exposure to the Chinese yuan.
The digital form of China's state currency issued by the People's Bank of China (PBOC). Unlike cryptocurrencies, it is fully centralized — every transaction is traceable by the state. It has a 1:1 value with the physical yuan. In 2024, it had over 260 million users and was available in more than 200 different use cases. It is also being tested in cross-border payments as part of the mBridge project.
An exchange-traded fund — an investment instrument that tracks an index, sector, or group of assets and trades like a stock. For investors in the Chinese market, popular ETFs include the iShares MSCI China ETF (MCHI), KraneShares CSI China Internet ETF (KWEB), or Xtrackers Harvest CSI 300 China A-Shares ETF. They offer diversified exposure to the Chinese market with lower risk than buying individual stocks.
Stocks of mainland Chinese companies listed on the Hong Kong Stock Exchange (HKEX), traded in Hong Kong dollars (HKD). H-shares are more accessible for foreign investors than A-shares, as they can be purchased through standard international brokers. The same company may have both A-shares (on mainland exchanges in CNY) and H-shares (on HKEX in HKD), often trading at different prices — this difference is known as the AH premium.
The main stock index of the Hong Kong Stock Exchange (HKEX), tracking the performance of the largest and most liquid companies listed on HKEX. It includes approximately 80 companies representing about 58% of the total market capitalization of HKEX. The index was first published in 1969. It is a key measure of the health of the Hong Kong and broader Chinese equity market.
The Hong Kong Stock Exchange — one of the world's largest exchanges by market capitalization. It trades in Hong Kong dollars (HKD) and is more accessible for foreign investors than mainland Chinese exchanges. It includes stocks of so-called H-shares (Chinese companies listed in HK) as well as Hong Kong companies. Direct access to HKEX is offered by brokers such as Interactive Brokers.
The central bank of the People's Republic of China, responsible for monetary policy, regulating financial institutions, and managing the country's foreign exchange reserves. The PBOC sets the daily reference rate (midpoint) for the yuan, which can fluctuate within a narrow band (±2%). It is also the issuer of the digital yuan (e-CNY). China's foreign exchange reserves managed by PBOC are the largest in the world at over $3 trillion.
The official name of China's national currency, meaning "people's currency" in Mandarin. The basic unit is the yuan. Renminbi is issued by the People's Bank of China (PBOC) and its exchange rate against the dollar and other currencies is a managed float — the Chinese government keeps it within a narrow band around a central rate. The renminbi has been part of the IMF's Special Drawing Rights (SDR) basket since 2016.
A program launched in 2014 that links the Shanghai Stock Exchange (SSE) with the Hong Kong Exchange (HKEX), enabling mutual trading. Through Shanghai Connect, foreign investors (via HKEX) can buy selected stocks traded on the SSE (so-called Shanghai Stock Connect). Similarly, there is a Shenzhen Connect linking HKEX with the Shenzhen exchange.
The Shanghai Stock Exchange — one of the world's largest exchanges by market capitalization. Trading occurs in Chinese yuan (CNY/RMB) and direct access for foreign investors is limited — mainly through Shanghai Connect. The SSE trades so-called A-shares (for domestic investors) and B-shares (for foreign investors, denominated in USD). The key SSE index is the SSE Composite (symbol: 000001.SS).
The collective name for programs linking Chinese mainland exchanges (Shanghai and Shenzhen) with the Hong Kong Stock Exchange. It includes the Shanghai-Hong Kong Stock Connect (2014) and the Shenzhen-Hong Kong Stock Connect (2016). It allows foreign investors to buy selected Chinese A-shares through HKEX and Chinese investors to buy Hong Kong stocks. Daily quotas limit the volume of trades through this system.
The basic unit of China's renminbi currency. One yuan is divided into 10 jiao and 100 fen. The international currency code is CNY (for mainland yuan) or CNH (for offshore yuan in Hong Kong). The symbol ¥ is shared with the Japanese yen, so it is sometimes written as CN¥ to distinguish them. The yuan has been strengthening against the US dollar, with analysts projecting further appreciation driven by China's strong export position and increasing global use of the renminbi.
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