COLUMN ONE : Wild Ride on China’s Exchange : Joining the rush for riches, the poor and the naive are mesmerized by the Shanghai stock market. Falling prices and buying on credit can lead to heartbreak, even suicide.

Lin Jianhua’s short, spectacular career as a stock market player ended tragically, when he jumped to his death from the 11th floor of the Second Light Industrial Corp. building last November in his native Hangzhou.

For a few months, the 37-year-old electrician at the giant Zhejiang Jute Mill, husband of another millworker and the father of a 9-year-old son, had traded as much as $100,000 a day on the Shanghai Stock Exchange through a local brokerage house.

Other workers at the mill, a rusting relic of the dying state-owned industrial system, gave Lin their savings, which he used as collateral to borrow money to play the market. He was their designated capitalist, sent like a working-class knight into the mysterious world of investment.

When the brief, sweet ride was over and Lin’s crushed body was found in the tiled courtyard at the base of the office building, only $200 remained in the account that once contained tens of thousands.

“I’ve lost all my money in stocks, as well as all the money of my friends,” Lin wrote in his suicide note. “I’ve no way out but this.”

Dutifully, Lin paid his respects to his parents, urged his son to study hard in school and encouraged his wife to remarry “a good husband.”

Lin was not the first to take his life since the country’s two major stock markets opened in Shanghai and Shenzhen in 1990. He was not even the first to jump from that building; a handful of others had already done so.

But his suicide, brought to light because of a precedent-setting lawsuit filed by Lin’s widow against the brokerage house that gave him the easy credit, focused attention on a nation coming to grips with the risky side of its emerging market economy.

There are vast sums to be made investing in China. Everyone knows the story of Yang Huaiding--”Millions Yang”--the former Red Guard who made a fortune in the Shanghai stock market and is a real estate mogul in Shanghai, China’s business hub.

But there are also vast sums to be lost.

While it may be old hat in the capitalist West, comfortable with its legends of fortunes made and squandered, devastating financial loss is something new to the socialist welfare state founded by Chairman Mao Tse-tung.

Rapid economic growth has produced stark inequities between state and private businesses, between farmers and city dwellers.

The high rollers in Shanghai and other major cities are a conspicuous presence, talking on their cellular phones, in karaoke bars and five-star hotel lobbies.

But the per capita income for most farmers is less than $100 a year. Lin and his wife, an inspector in the textile department, had monthly salaries of less than $50 each.

Confronted with an economic system in which the rules changed overnight, millions of Chinese feel abandoned by the “to get rich is glorious” era ushered in by leader Deng Xiaoping in the late 1980s. Desperate to catch up but totally unprepared for the risks involved, many have plunged head-first into the stock market.

“The stock market is still new in China,” said Shao Daosheng, a psychologist with the Chinese Academy of Social Sciences in Beijing. “That in itself is not bad. But few people have any knowledge of how the stock market works. It is not a mature market. Knowledge of the stock market in the West is no help here. Naturally, people get in trouble.”

An extremely active market existed in Shanghai before the Communist victory over the Nationalists in 1949. But only a handful of people are old enough to remember.

After only four years, trading on the new Shanghai market on some days surpasses the volume of the long-established Hong Kong market.

Last year, 4 million Chinese bought and sold stock. The average daily volume exceeds 500,000 transactions. Trading now averages more than $1 billion a day. For the first time in modern Chinese history, companies are concerned about profit and stockholder contentment.

Despite the large volumes traded, the markets remain largely unregulated. In 1993, the weak securities regulatory commission lodged a complaint of insider trading for the first time.

In China, stock trading is a new sport that more resembles Las Vegas than Wall Street.

Stock trading outlets that look like racetrack betting windows are scattered across China, from Tibet to Inner Mongolia.

In Hangzhou, stock market mogul Li Xun, a former executive with the Bank of China, operates four trading centers, including one in a lakeside park named “Orioles Singing in the Willows.”

Public park officials gladly rented Li, general manager of the nationwide Zhejiang Securities Co., space in a park pavilion. There he installed an elaborate computer system and an outdoor, all-weather electronic tote board.

“We have 6,000 people who come here each day,” Li said proudly. He ignored the complaint of one customer in the trading center who griped loudly that the outdoor board showing stock price quotations was too low, making it difficult to see over other people’s shoulders.

On April 20, a day in which the wildly fluctuating Shanghai market hit a record low, Li opened the country’s largest stock trading center in a converted movie theater in Beijing. Li and others in the brokerage business are betting that the Chinese are permanently hooked on the market.

“I’m glad that the market is down,” he said as attendants released several hundred celebratory pigeons into the air, and 15 silk-draped women hefted a giant red ribbon. “It means that people who buy stock now will make lots of money when the prices go back up.”

Dr. Zeng Xingchu, professor at East China Normal University in Shanghai and editor of Popular Psychology magazine, reports on the phenomenon of stock market absenteeism caused by those who desert their jobs for a while to stand mesmerized before trading center computer screens glowing with listings.

Zeng estimates that about half of the university’s 4,000-member staff is infected with the stock market bug.

“Some of my graduate students go to the stock market before they come to my class,” Zeng said.

China’s passion for the stock market has inspired several recent plays and movies dealing with families and communities torn apart by market dealings.

The first of the dramas, a popular play titled “Gu Piao OK” (“OK Stock”), had its debut in Shanghai in 1992.

Stock market speculation is also the subject of a new television series and two recent movies, including the comedy “Gu Feng” (“Stock Craze”).

Although it ends on a happy note, the plot of “Gu Feng” in many ways resembles the real-life saga of Lin Jianhua, the millworker. In the film, a hard-working man, jealous of his wife’s success in the market, takes money from a friend and loses it in one day.

Forlorn, fearful of bringing shame to his family, he threatens suicide from the roof of the new Holiday Inn Crown Plaza in Shanghai. The film’s director was trying to deal with the country’s changing values in which get-rich-quick speculators are often held in higher esteem than the heroic worker of old.

Only a decade ago, for example, Lin and his colleagues at the mill were the working-class heroes of egalitarian China.

They never made much money--not more than $25 a month in most cases. But their needs were met by a protective centralized state economy that guaranteed housing, food and schooling for their children.

But in today’s changing China, the once-favored factory jobs are no longer considered plums.

Xu Jianyao, the manager at the textile division of the Zhejiang Jute Mill, which sits on the banks of China’s grand canal, said it now has to send recruiting teams into rural areas to find workers.

“People used to like to work here because of the welfare society,” Xu said, who represents the second generation in his family at the mill, “but today young city people no longer want the jobs.”

The sudden lowering in their status, not to mention their relative incomes, produces a kind of desperation among those holding traditional jobs. Many workers at the mill had faith that Lin, whom Xu described as “well-liked and responsible,” would guide them with his investments back into an economy they felt had abandoned them.

In her lawsuit against the Zhejiang International Trust & Investment Corp., the brokerage house where Lin traded, widow Xu Lanfang alleged that the company broke Chinese law by allowing him to buy the stock on margin, putting up only a small percentage of the stock value.

The case went before the Hangzhou District Court in March and was settled with a 50,000-yuan ($6,000) “humanitarian” payment to the widow.

Significantly, however, the court did not rule on charges of illegal dealings by the brokerage house.

So the several dozen millworkers who trusted Lin with their savings will not get their money back.

The lesson to be learned from this episode, mill manager Xu said in an interview, is that stock buying is a risky prospect.

“You must be psychologically prepared to lose,” Xu said, gazing toward the floor as he talked. “Lin was not prepared. He failed to bear the burden.”

Once he discovered that he had lost all his money and the money of his co-workers, Lin went to see the only man in Hangzhou he believed could save him.

Li Xun, founder of the lakeside trading center and the Beijing theater center, has his headquarters on the 11th floor of the Second Light Industrial Corp. building in Hangzhou’s downtown business district. Li’s prominence in the Hangzhou securities business drew law firms to the same building, as well as the other dejected stock traders who took the fatal plunge.

In an interview, Li said that he is often approached by distraught investors.

“I’ve had many cases in which people wanted to kill themselves. I’ve even had whole families that threatened to kill themselves, but I managed to talk them out of it.”

But each of the three or more times the distraught Lin came to see him, Li was not in the office.

Finally, Lin just gave up and hurled himself from the window only a few paces from Li’s door.

His suicide note ended with a stark admonition to his wife that several newspapers have since reprinted as one of the object lessons popular in the press here.

“Don’t do any stock business!” Lin warned his wife. “Remember! Remember!”