A trader used to New York or London who buys a Shanghai-listed stock in the morning and wants to sell it after lunch will run into a wall: it cannot be done. Neither can a stock jump 40% on a blowout earnings report in a single day on the main board. China's stock market rules differ from Western exchanges in ways that change how prices move, how risk builds up, and how you should size positions. Here are the rules that matter most, limited to the ones that have been stable for years.
The exchanges and boards
Mainland China's stock market is split across exchanges and boards with different rules:
| Venue | Exchange | Focus |
|---|---|---|
| Main Board | Shanghai | Large, established companies, many state-owned |
| Main Board | Shenzhen | Established companies, more private-sector mix |
| STAR Market | Shanghai | Science and technology innovators, launched 2019 |
| ChiNext | Shenzhen | Growth and innovative companies, launched 2009 |
| Beijing Stock Exchange | Beijing | Smaller, innovative SMEs, launched 2021 |
Shares listed here and priced in yuan are known as A-shares. Their rules apply to everyone who trades them, including foreign investors using Stock Connect.
T+1 trading in China
The T+1 rule means shares bought on a trading day cannot be sold until the next trading day. If you buy on Monday, the earliest you can sell is Tuesday.
This is different from markets such as the US, Hong Kong or Europe, where you can buy and sell the same shares within one session (even though settlement of the cash takes a day or two). The practical consequences:
- No same-day round trips in the same stock. Pure intraday trading strategies do not work in A-shares.
- Overnight risk is unavoidable for every purchase. If bad news arrives after you buy, you carry it into the next day.
- Selling then buying is allowed. If you already hold shares, you can sell them and buy back the same day; the restriction is on selling shares bought that day.
The rule was introduced in the 1990s to curb speculation. Debates about switching to T+0 come up periodically, but T+1 has remained the rule for A-shares.
Daily price limits on Chinese stocks
Every A-share has a maximum price move per day, measured from the previous close:
| Board | Daily limit |
|---|---|
| Shanghai and Shenzhen main boards | ±10% |
| STAR Market | ±20% |
| ChiNext | ±20% |
| Beijing Stock Exchange | ±30% |
When a stock reaches its upper limit it is "limit-up": it can still trade, but not at a higher price. If sellers dry up, the stock is effectively frozen with a queue of unfilled buy orders. The same happens in reverse at "limit-down", and that is the dangerous case – you may be unable to sell for days if bad news keeps the stock pinned at the floor.
Newly listed stocks on the STAR Market and ChiNext have no daily limit for their first five trading days, which is why debut-day moves on those boards can be dramatic.
ST and *ST: risk warning labels
Companies with serious problems – consecutive losses, negative net assets, audit issues and similar – are tagged with "ST" (special treatment) or "*ST" (where there is a delisting risk) in front of their name. On the main boards these stocks have historically carried a tighter daily limit than ordinary shares; check the current rule with your broker, as it has been revised. The label is a strong warning: it means the exchange has flagged financial or compliance trouble, and delisting is a real possibility, especially as China has tightened delisting rules in recent years.
STAR Market vs ChiNext: what is different
Both are growth boards, and both are open to the registration-based IPO system, under which the regulator's role shifted toward disclosure review rather than judging a company's investment merits. The STAR Market pioneered this approach in 2019; ChiNext adopted it in 2020, and the main boards followed.
Differences worth knowing:
- Focus. STAR targets hard technology – semiconductors, biotech, advanced manufacturing, new materials. ChiNext is broader, covering innovative and growth companies across sectors.
- Listing standards. STAR allows several listing routes, including some for companies that are not yet profitable, which matters for research-heavy firms. ChiNext also offers multiple routes.
- Price limits. Both use ±20% daily limits, double the main board, and no limits for the first five days after listing.
- Investor suitability. Individual investors must meet minimum asset and trading-experience thresholds to trade on these boards directly. STAR's threshold is higher than ChiNext's. Check current requirements with a broker, as details can change.
- Shareholding structures. STAR permits weighted voting rights and red-chip structures under certain conditions.
For a foreign investor, the takeaway is that STAR and ChiNext stocks are more volatile by design: wider daily limits, younger companies and, in STAR's case, some without profits.
Other rules worth knowing
- Trading lots. Buy orders on the main boards are generally made in multiples of 100 shares.
- Short selling is limited to designated securities through margin-and-securities-lending programmes, and is much less common than in Western markets. Northbound Stock Connect investors face pre-trade checks that prevent naked short selling.
- Trading halts and suspensions. Companies may suspend trading for major announcements; suspension practice has been tightened over time.
- Trading hours include a midday break, as on several Asian exchanges.
A practical checklist for trading A-shares
- Size positions for overnight risk. T+1 means every trade is at least an overnight hold.
- Know each stock's board and limit before you buy – 10%, 20% or 5% changes your worst-case day.
- *Avoid ST and ST stocks unless you understand the delisting process in detail.
- Plan for limit-down liquidity. Assume you might not be able to exit a falling stock for more than one session.
- Check eligibility and suitability rules if you are trading via Stock Connect or a mainland account.
- Prefer diversified exposure if you want China in a portfolio without the single-stock mechanics.
China's stock market rules are not arbitrary; they reflect a regulator managing a market with a very large base of individual traders. T+1 and price limits slow things down on the surface, but they can also bottle up pressure that releases over several days. Learn the rules before you trade, and they stop being surprises.
This article is for education only and is not financial or investment advice.
