Pioneer's bold steps created exchange

Yu Guogang was one of the first people to ring the trading bell after the opening of the first stock exchange in the People's Republic of China.

In the almost 30 years since, he has witnessed the tremendous growth of the nation's capital market.

Yu, 76, one of the founders of the Shenzhen Stock Exchange and a recipient of a national Reform Pioneer medal, said the principle of bold reform and cautious implementation guided him to accomplish the arduous task of establishing the Shenzhen exchange.

The origin of China's modern-day securities market can be traced back to October 1986, when Shenzhen's city government issued interim provisions for a pilot program for shareholder restructuring of selected State-owned enterprises in the Shenzhen Special Economic Zone.

In 1987, five selected enterprises started to offer shares to the public through three securities brokers. The securities market was taking shape in Shenzhen, but it still lacked national regulations and an official management committee.

Yu was recruited to come up with draft security market regulations.

"At that time, we did not have any resources. Our team worked in the living room of my home and borrowed some chairs and desks from the Bank of China," he recalled.

In that environment, they translated and studied materials including rules and laws related to companies, accountancy, securities and exchanges in developed economies.

Obtaining approval from the central government was also full of twists and turns. While Beijing was still considering the proper name for the imported financial system, the stock market in Shenzhen couldn't wait any longer because trading through securities brokers had developed into a chaos of illegal and insider dealing.

In November 1990, the city's then Party chief, Li Hao, made the call to open trading on Dec 1 after examining a simulation created by Yu and his colleagues, even though Beijing had yet to give the green light.

"Reform needs to be brave," Yu said. "We could be brave because we had done our best and checked everything out."

Several days before the opening, he arranged to buy an opening bell from Hong Kong, which was the same as the one used at the New York Stock Exchange.

On Dec 1, 1990, he rang the Shenzhen market's bell for the first time.

"It was like the birth of my own child and my eyes were filled with tears," he said, still excited and proud when recalling the historic moment.

His work laid a sound foundation for the financial institution to develop technology into one of its most significant advantages, having developed key technologies for trading, surveillance, information disclosure and the financial cloud, as well as leading the exchange to achieve computerized trading, paperless settlement, satellite-supported communication and abolishment of the trading floor.

After more than 17 years of uninterrupted operation, the bourse also started to export its technology, with the latest move to build a trading and surveillance system for the Pakistan Stock Exchange.

The total market value of the more than 2,200 companies listed in Shenzhen reached 23.7 trillion yuan ($3.4 trillion) last year.

Looking ahead, the retired pioneer said he firmly believed reforms will continue and the biggest challenge for the Shenzhen Stock Exchange this year is to speed up the registration-based reform of the ChiNext board.

"When facing reforms, we need to be confident and, meanwhile, have all-inclusive preparations and far-reaching strategies," he said, adding that had been the spirit guiding him to advance reforms since the founding of the exchange.