A Communist Market Is Like Playing Russian Roulette With Your Money

824 Words Apr 18th, 2016 4 Pages
I argue investing in a communist market is like playing russian roulette with your money. Robert Arnott, a professional investor, famously saying “in investing, what is comfortable is rarely profitable” would agree. Just like the chamber of a gun, a communist market will have plenty of area open for foreign investment. However, the one chamber holding a bullet represents the uncertainties involved in doing business where the government is in complete control of the market. Benjamin Franklin wisely said, “an investment in knowledge pays the best interest.” This goal of this paper is to help readers make better investing decisions in China’s security markets by enhancing their knowledge on the framework of its stock exchanges, history of fraud within the market and important regulations. First, the paper summarizes the history of China’s largest stock exchange to develop a framework to build off of. Second, the paper discusses the four stages modern Chinese securities went through before taking their current form. Third, the paper reviews important pieces of legislations resulting from the four stages that affect foreign investors. Fourth, the paper examines the different ways China has privatized its state-owned enterprises and what this means to investors . Last, the paper closes summarizing the findings that will enhance the reader 's investing decisions most.
The Shanghai Stock Exchange (SSE) is the largest of China’s three stock exchanges, followed by the Hong Kong Stock…

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