Chinese Farmers Begin to Speculate on Shares

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Last updated at: (Beijing Time) Monday, December 30, 2002

Chinese Farmers Begin to Speculate on Shares

Farmers in China are no longer just toiling and moiling on the cropland, but many are becoming new participants in China's securities market.

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Farmers in China are no longer just toiling and moiling on the cropland, but many are becoming new participants in China's securities market.

"Among approximately 60,000 stockbrokers in the city of Wenzhou in east China's Zhejiang province, about 16,000 are farmers," said Wang Sunle, general manager of the Wenzhou office of the China Galaxy Securities Co., Ltd.. In some well-to-do areas of Cangnan, Rui'an and Leqing in Wenzhou, more than half of the stockbrokers are diligent and experienced farmers. Speculation on shares has been recognized and accepted by affluent local farmers as a new means of financing.

A host of securities firms opened services in outlying small cities in coastal Zhejiang province. The Zhejiang Securities, China Galaxy Securities and Zhongfu Securities have all set up their "chain stores" in small cities of Wenzhou to attract more farmers and there are over 10 securities services in Wenzhou.

The rural stockbrokers are mainly enterpreneurs and even housewives from better-off families. Yang Dongju, an astute rural woman in her 40s from the countryside of Wenzhou, is very familiar with such terms as "bullish market", "bearish market" and "state-controlled shares".

"Now we farmers are well off and speculation on shares is no longer the privilege of the urbanites," said Mrs. Yang with smiles.

"In Wenzhou region, capital accumulation has finished while theprimitive incentive for investment is still very strong," said Yang Liuyong, an associate professor of finance from prestigious Zhejiang University.

According to a sample survey conducted by the Hangzhou branch of the People's Bank of China (PBC) lately, Zhejiang province, oneof China's leading economic powerhouses, has a scattered, idle fund of up to 830 billion RMB yuan (100 billion US dollars) among the private owners.

Farmers' bulging purses have attracted bill brokers to the countryside in Zhejiang.

Meanwhile, in the little Dong'an town, an out-of-way town in booming Wujin city of eastern Jiangsu province, which is adjacent to Zhejiang, the securities service that opened one month ago has so far drawn nearly 60 local farmers, with the total exchange of shares over 10 million RMB yuan (1.2 million US dollars).

In central-south China's Hunan Province, securities have also been turned into a new brisk business in its rural areas. The Hunan branch of the Agricultural Bank of China (ABC) opened a network for those farmer stockbrokers with its nearly 200 service offices in the province.

China now boasts more than 60 million stockbrokers, said Associate Prof. Yang Liuyong from the Zhejiang University. "Thoughonly a minor portion of China's vast rural population, an increasing number of farmer stockbrokers, nevertheless, are sure to exert a far-reaching impact on the country's growing stock market."

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