From: xlli@silver.ucs.indiana.edu (xiao-lin li)
Subject: China Stock Market Riot.
Organization: Indiana University
Date: Wed, 12 Aug 1992 17:07:16 GMT


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Tens of Thousands of Chinese Would-Be Stock Investors Riot .......... 
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From: YC Kim and Huijie
Source: World Bank Midday News & AP-DJ  8/10/92

SHENZHEN, China - Tens of thousands of angry would be investors took to the
streets of this southern Chinese city, setting fire to a police car in
protest against alleged corruption in the sale of share application forms.
Between 50,000 and 60,000 demonstrators, some holding placards bearing the
slogan "Down with Corruption," were involved in the protest.

Reuters news service reported "near hysteria" in Shenzhen, a special
economic zone adjacent to the British colony of Hong Kong, as demonstrators
kicked and beat plainclothes police, set a van ablaze and overturned half a
dozen other vehicles, including a police car.

Riot police fired at least 10 tear-gas shells in one part of the city - a
booming metropolis that is a showcase for China's economic-reform drive-in
an attempt to quell the unrest. But officials denied a report in a Hong Kong
newspaper that police had fired shots into the crowd, wounding at least one
person. Weekend of Chaos Monday's violence capped a weekend of chaos as an
estimated one million people from all over China tried to cash in on the
booming stock market in Shenzhen.

Long, unruly lines formed as speculators sought to purchase one of the five
million application forms that were to be sold Sunday and Monday. One in
every 10 of the applications, to be chosen by lottery, will give each holder
the right to buy 1,000 newly issued company shares later this year.

The crowds began gathering at the application locations as early as Friday.
Hong Kong media reported fighting in the lines Saturday, and Hong Kong
television said Sunday night that police were using electric batons and
whips and firing in the air to keep order. Police said one man died in the
crush Sunday, but authorities later denied that report.

Officials announced Sunday that all the applications had been sold. But the
thwarted investors refused to believe that all five million forms had been
sold in the first day of what was supposed to be a two-day sale.

On Monday, between 50,000 and 60,000 demonstrators, some holding placards
bearing the slogan "Down With Corruption," gathered in heavy rain outside
the municipal offices in Shenzhen and accused officials of keeping the
coveted share-purchase applications for themselves and their relatives, Hong
Kong radio and television said. The Hong Kong broadcasts also said
demonstrators stoned police cars and some people were arrested before the
crowd dispersed.

The issuance of shares by enterprises is a recent phenomenon in China, which
until 1990 hadn't allowed them since the Communist Party took over the
country in 1949. A craze for share trading has swept China in recent months
despite official warnings about the dangers of blindly investing, in the
misguided belief that prices can only go up.

The Associated Press reported from Beijing that the Shenzhen violence could
undermine the position of reformers in the central government, who have been
trying to put into place new policies calling for rapid economic
liberalization, including development of stock markets. They have tried to
overcome hard-line opposition within the Chinese leadership to such
capitalistic inroads by arguing that economic growth will help social
stability.

The last time the hard-liners cracked down was when political liberalization
urged by other reformers led to the massive pro-democracy demonstrations at
Tiananmen Square in the capital in June 1989. Those demonstrations ended
when troops fired into the demonstrators, killing many of them. The country
then entered a period of retrenchment on reforms, which was eased only this
year.

The violence in Shenzhen is the worst to hit China's brief but turbulent
flirtation with stock-market capitalism. Shanghai trading, begun in 1990,
has been marked by several stampedes. In Shenzhen, which began share trading
last year, two men were murdered earlier this year as gangsters fought over
positions in lines of share buyers. Shenzhen officials later arrested
hundreds of alleged gangsters.


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Shenzhen Suspends Stock Trading as Hopeful Investors Queue .......... 
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From: Jian Liu
Source: AP-DJ 8/11/92

BEIJING -- After a day of riots by frustrated investors, Shenzhen, China
suspended trading Tuesday on its stock market as thousands more people lined
up for a chance to purchase red-hot shares, reports said.

Police wielding truncheons used tear gas, rubber bullets and water cannon to
break up protests Monday night by would-be investors who claimed corrupt
officials were hoarding applications to buy the coveted shares, Hong Kong
media reported. Stocks already issued on the fledgling exchange have shot up
in price.

At least 10 people - including some policemen - were injured, a few police
vehicles were torched and three people were arrested, the reports said. Some
protesters chanted 'down with corruption' and waved large banners with
anti-corruption slogans.

A Shenzhen city official who refused to identify herself, blamed the
disturbances on a small group of 'bad people.'

The angry crowd finally disbursed late in the night, in part because
officials promised to distribute more share applications Tuesday afternoon.

The city government closed the stock market for afternoon trading because
brokerages were so busy handing out the forms, said Shenzhen stock exchange
official Chen Xiaoling.

The violent protests Monday capped three days of growing disorder in
Shenzhen as hundreds of thousands of people - one million people according
to one official account - from all over China lined up for a chance to buy
new stock issues.
Newsgroups: soc.culture.china