China market terminology explained

Chinese companies that are incorporated and listed in the People's Republic of China (PRC) generally issue A-, Band H-share classes. Depending on where they are listed, these Renminbi (RMB)-denominated shares may trade in different currencies.

Chinese companies that are incorporated and listed outside of the PRC may be referred to as Red chips, P chips, N-shares or ADRs, depending on their revenue sources and listing location.

A-shares

A-shares refer to shares issued by Chinese companies incorporated in China, listed in the domestic stock market and open to foreign investors via the Qualified Foreign Institutional Investor (QFII), RMB Qualified Foreign Institutional Investor (RQFII), or the Stock Connect programs.

B-shares

B-shares refer to shares issued by Chinese companies incorporated in China, listed in the domestic stock market and open to foreign investors. They trade in USD on the Shanghai Stock Exchange and in HKD on the Shenzhen Stock Exchange.

H-shares

H-shares refer to the shares issued by Chinese companies incorporated in China and are traded in Hong Kong and other foreign exchanges. Similar to other securities listed on the Hong Kong Stock Exchange, H-shares trade in HKD and do not have any restrictions on who can trade them.

N-share

N-shares refer to shares of Chinese companies incorporated outside the mainland and are listed on the New York Stock Exchange, the NASDAQ Exchange or the NYSE American. A majority of its revenue or assets must be derived from Mainland China. ADRs of H-shares and Red chips are also sometimes called N-shares.

Red chips

Red chips refer to shares of Chinese companies incorporated outside the mainland (mostly in Hong Kong) that trade on the Hong Kong Stock Exchange, and are usually controlled by or affiliated with the Chinese government.

P chips

P chips refer to shares of Chinese companies incorporated outside the mainland (mostly in Hong Kong) that trade on the Hong Kong Stock Exchange, and are owned by private sectors in China.

ADRs

American Depositary Receipts (ADRs) refer to (Chinese) companies that are registered outside the United States and are traded on American Stock Exchanges.

CGB

China Government Bonds (CGB) are issued by the Chinese central government. The annual key tenors of the CGB issuance plan are formulated by the Ministry of Finance, subject to the limits approved by the National People's Congress.

CNY Bonds

CNY (or RMB) bonds issued in the onshore market (China Interbank Bond Market or Shenzhen/Shanghai Stock Exchange) by Chinese enterprises.

Corporate Bonds

Corporate bonds issued by non-financial corporations.

Dim Sum Bonds

RMB bonds issued offshore in Hong Kong by Chinese and foreign companies.

Enterprise Bonds

Bonds that are mainly issued by SOEs.

Financial Institution Bonds (FIBs)

Financial Institution Bonds are issued by financial institutions other than the three policy banks. 

LGB

Local Government Bonds (LGB) are issued by local governments and are relatively new in China.

NCD

Negotiable Certificates of Deposit (NCD) are short-term funding instruments that are issued by commercial banks. The tenors of NCDs have been limited by the PBoC to less than a year, with NCD funding included as a part of banks' inter-bank liability.

Panda Bonds

RMB bonds issued in the onshore market by foreign companies.

Policy Financial Bank Bonds (PFB)

Policy financial bonds are issued by the three policy banks – China Development Bank, Agricultural Development Bank of China, and Export-Import Bank of China.

USD China Bonds

USD bonds issued in the the offshore market by Chinese enterprises.