New Securities Trading System Debuts in China

China’s reformists moved a little closer to their vision of a socialist Wall Street today with the formal launch of a centralized securities trading system.

Computer screens flickered in six cities across China, linking for the first time 18 corporations licensed to trade.

“We had brisk quotes and trading,” Zhang Xiaobin, general secretary of the exchange’s executive council, told a news conference.

The stock market experiment--a radical departure from the orthodox Marxist tenets of the ruling Communist Party--is aimed at tapping mountains of unused money to meet the government’s budget deficit and fund new industrial projects.

“This is the beginning of something very important, but it’s got a long way to go,” said a Western economist at the opening of the Securities Automated Quotations System (STAQ).

For now, the government allows trading in only four issues of treasury bonds.

Officials described STAQ as a “Chinese version of the U.S. NASDAQ national market system.”

Seven minutes after opening, STAQ’s first trade was 500,000 yuan ($95,000) of three-year 1989 treasury bills. At an interest rate of 14% they are an attractive buy, with inflation running at less than 10% annually.

By the end of the seven-hour trading day, STAQ had seen a total traded volume of 3.85 million yuan ($740,000).