Walter Hutchens’ Blog

According to new statistics from the CSRC, the number of securities accounts in China decreased by almost a million last month.

The aggregate number of securities accounts–almost 70 million–is often cited as a metric for the rapid growth of China’s stock markets. As both of the new books (Green and Walter/Howie) on China’s stock markets detail, this number is wildly misleading. The number of overall participants is probably not even 10% of this figure. It falls in half immediately because an investor would have to open an account for each of the Shenzhen and in Shanghai exchanges, then many accounts are dormant or active only for IPO subscriptions, and many investors open multiple accounts (illegally using the ID’s of others). Then, on the other hand, some single accounts are actually for underground funds and so represent multiple investors.

At any rate, this rapid decline is curious. It could signal that people are withdrawing from the markets, shunning them.