Middle and low-income investors took up 70 percent of China's investor population and nearly ten percent of new investors never thought of a loss on the stock market, according to a survey report released by the Securities Association.

The Report said 32.7 million new stock accounts had been open last year, ten times of that of the previous year. The country's investor population had surged to 136 million by the end of 2007.

Individual investors took up 48 percent and 98 percent of all investors on the stock market and fund market, respectively.

The Beijing-based Securities Association conducted two surveys - survey on China's stock market investors and survey on fund investors - at the end of 2007, aimed to make clearer the structure and condition of fast-growing individual investors.

"China's capital market has a high proportion of middle and low-income investors, who have little awareness of their rights as a shareholder. Most of them are just interested in short-term speculation," Huang Xiangping, president of the Securities Association, said on Monday.

Statistics show middle and low-income investors, with monthly income less than five thousand yuan (688.7 U.S. dollars), accounted for nearly 70 percent of the investors population.

In the survey, 9.4% percent of the new investors who entered the market in 2007 said they never thought of a loss.

Experts noted that was because the later comers had not experienced a bear market.

China's stock market experienced a round of bull market in 2007. The key benchmark Shanghai Composite Index soared from 2,728 points on January to 5,261 points, or 92.85 percent, on December 28, luring a large number of ordinary Chinese citizens to flock to put their deposits into the stock market without thinking of a possible loss.

Generally, a bullish market cycle will last some 20 months, but China's bullish market had remained 29 months from June. 6, 2005 to November, 2007.

Analysts expect the Chinese stock market will continue its bull run in 2008, but the chances for speculative profit would be more slender. And with the government's tightening policies in the pipeline, investors have been warned to be more selective.

"Whether a country could develop a sound stock market depends on the system of investor protection. It is urgent for China to equip shareholders with basis knowledge about securities," said Huang.

China's securities regulator is planning to boost investors risk education by establishing a department to be fully responsible for the matter, he added.

(Xinhua News Agency January 15, 2008)