Chapter Thirteen: The Rise of Shanghai Finance

At the same time.

Huaxin Securities, Hudou Branch.

It was located on the third floor of the building at 1568 Century Avenue, adjacent to Lujiazui Financial Plaza. Five kilometers southeast lay the renowned Financial Trading Plaza.

Without exaggeration, this was the Chinese equivalent of Wall Street, a hub where countless finance professionals gathered.

As the A-share market closed at 3 p.m., Tao Yu’ang, a fund manager at Huaxin Securities, exhaled deeply and looked toward his colleague Yue Shuxue at the neighboring workstation. “Xue’er, how’s the Hong Kong stock market doing this week?”

The two not only graduated from Hudou University of Finance and Economics but had also joined Huaxin Securities together—and were a couple off the clock.

Originally, Tao Yu’ang’s academic record alone wouldn’t have qualified him for Huaxin Securities, but Yue Shuxue had leveraged her family connections to secure him an internship.

After nine years of hard work, Tao Yu’ang had steadily established himself at Huaxin Securities, managing funds totaling 260 million Chinese yuan, all related to infrastructure concepts.

“The Hong Kong stock market is trending strongly upward, three consecutive monthly gains. It looks poised to continue climbing,” Yue Shuxue replied with a faint smile.

“What about the inflow of funds?” Tao asked.

“The market generally expects a return to the 2007 peak. Capital is rushing in. My three funds added 24 million this week alone.”

“Southbound capital is that substantial?”

Tao was somewhat surprised.

“Yes, I was surprised too. Maybe investors think the Hong Kong market will yield larger gains,” Yue speculated.

China has three stock markets: mainland A-shares, Hong Kong stocks on the island, and Taiwan stocks on the island.

Hong Kong and Taiwan are both in southern China, and capital moving southward via the “Hong Kong Stock Connect” is naturally called southbound capital.

Conversely, capital from Hong Kong and Taiwan entering the A-share market through the Shanghai and Shenzhen Stock Connects is called northbound capital.

Notably, the main force behind northbound capital is often not individual investors from Hong Kong or Taiwan but international capital.

For example, an American wishing to invest in A-shares cannot simply open a bank account on the mainland.

They must first open an account in Hong Kong or Taiwan, transfer funds to accounts at foreign brokerage firms such as JPMorgan Chase, Goldman Sachs, or UBS, and then invest in A-shares through the Shenzhen or Shanghai Stock Connect.

Since northbound capital consistently achieves a win rate of around 65%, it has earned the nickname “smart money” and serves as a crucial investment indicator.

...

Hearing of his girlfriend’s soaring performance, Tao Yu’ang extended an invitation: “It’s the weekend—how about a drink at a pub tonight?”

“Sure,” Yue Shuxue agreed with a hint of reluctance.

They had done everything they needed to—except for one thing: a marriage certificate.

---

“Oh, by the way.”

Yue Shuxue suddenly remembered something and added, “Did you know our alma mater’s current juniors and seniors are outstanding? In just 20 trading days, one student achieved a 42.4% return, and nearly 30 others surpassed 25%.”

“42.4% return?”

Tao Yu’ang was stunned; his pupils dilated in disbelief.

A 42.4% return in 20 trading days averages to about 2.12% daily—a top-tier achievement in the industry.

Even a top trader at Huaxin Securities wouldn’t dare claim such a return over 20 trading days.

“Are they cheating?”

Tao whispered.

Nearly 30 students exceeding 25% returns already surpassed top financial schools like Central University of Finance, University of International Business and Economics, and Southwestern University of Finance.

“I’ve been wondering the same thing, which is why I’m telling you,” Yue Shuxue also lowered her voice, aware of nearby colleagues.

Cheating in simulation trading is easy: if students gain insider information or have wealthy family backing, they can manipulate a small-cap stock in live trading.

Since simulations track real markets closely, pushing up a small-cap stock requires a relatively modest amount of capital—about 10 million yuan would suffice.

Frowning deeply, Tao Yu’ang felt uneasy.

If these simulation competition results are heavily inflated, they—the two recommenders—might face severe criticism.

“I’ll call Professor Wang Xingbang to check. Hopefully, we’re overthinking this.”

“Let’s wait until after work,” Yue suggested.

“I understand.”

Though they held some authority, they couldn’t control everything. If “trash” candidates were admitted through internal referrals, they could be implicated.

The purpose of internal referrals was to have employees vouch for and bring in outstanding talent, reducing HR’s workload and interview costs.

Why do internal referrals bring in excellent talent?

Because simply entering Huaxin Securities proves the recommender’s credibility.

Moreover, internal referrals operate on a “joint liability” basis—if someone tries to sneak in friends or relatives, they risk losing their own job as well.

Thus, recommenders already act as a form of HR.

...

Hudou University of Finance and Economics.

Investment Studies Faculty Office.

Wang Xingbang finally straightened his slightly bent back after two or three years and happily shared the students’ achievements with fellow finance professors: “Guess how impressive this year’s graduates are?”

Before anyone could respond, he revealed the answer himself:

“The top student achieved a 42.4% return in just 20 trading days!”

“And 30 others had returns above 25%!”

Hearing this, Professor Ma Shoutu of Macroeconomics looked incredulous and challenged, “Old Wang, you’re not losing your mind, are you? I can accept 42.4% as a lucky trade, but 30 students over 25%? That’s nonsense.”

“Exactly, nonsense.”

“Even with the top scorers from Central University of Finance, there’s no way 30 students hit 25% in 20 trading days.”

“Are you feverish, Old Wang?”

The finance professors echoed these doubts.

Some even reached out to touch Wang’s forehead, checking if he had a fever.

“Slap—”

Wang Xingbang brushed their hands away, choosing to prove it with facts.

He casually walked to a workstation, logged into his 163 email account, and opened a file saved on a transfer station containing the performance statistics.

“Look for yourselves. I, Wang Xingbang, never lie.”

As the file opened, the finance professors stared in disbelief.

“My goodness, so many geniuses in this class?”

“Investment studies are rising. Once these students join major securities firms, in three years, our B+ program will definitely reach A, maybe even A+!”

“Is this just a product of the times, or do they really have this talent?”

“Who cares about the times? Simulation returns reflect true ability. I must screenshot this and send it to finance professors at Central University, Southwestern University, and others.”

It is often said that a teacher’s role is lifelong; for educators, seeing students succeed brings immense pride.

Only those who have been teachers know how exhilarating it is to have students flourishing everywhere.

As the “report card” spread online and reached the inboxes of professors at Central University of Finance, Fudan University, Southwestern University of Finance, Jiangsu and Zhejiang universities—top-tier institutions—the group of finance professors, many over fifty, collectively grew restless.

“Has Hudou been dosed? So fierce.”

“This year’s investment graduates from Hudou are impressive—higher returns than those from Central University and Southwestern University.”

“42.4% return, He Jing is truly exceptional. Why haven’t I heard of her before?”

“Hudou is rising—it’s interesting.”