In China, there is an alphabet soup of share types. We hope to clarify some of the confusion here. Investors should be aware of the difference between those shares listed in Hong Kong and those listed in China.

Mainland China Listed Shares
Shares listed in mainland China (such as on the Shanghai or Shenzhen stock exchanges) are not fully open to foreign investors.

• A-shares are local shares denominated in Renminbi. Originally, only Chinese citizens were allowed to purchase A-shares. At present, foreign investors can participate indirectly in the A-share market through funds offered by companies that have received approval to invest in mainland China through the foreign institutional investor program.
• B-shares are local shares denominated in a foreign currency. Originally, these shares were only open to foreign investors. However, since 2001, Chinese citizens may also purchase B-shares.

Hong Kong Listed Shares
Hong Kong listed companies are open for purchase by foreign nationals and residents of Macau, Hong Kong and Taiwan. At present, mainland Chinese retail investors are not allowed to directly invest in Hong Kong listed companies, although a "through-train" program is expected to be offered. Mainland investors can invest in Hong Kong through the QDII (qualified domestic institutional investor) program in which they can purchase funds which are then professionally managed and invested by institutions into the Hong Kong market. The two types of shares below are used in regards to companies whose business interests are primarily in mainland China as opposed to Hong Kong listed companies whose primary businesses are in Hong Kong or overseas.

• H-shares are companies incorporated in mainland China whose primary business interests are also in mainland China.
• Red Chips are companies incorporated in Hong Kong whose primary business interests are in mainland China, as opposed to Hong Kong.