Define: Red Chip

UK Accounting Glossary

Definition: Red Chip


Quick Summary of Red Chip


A company based in Mainland China that is incorporated internationally and listed on the Hong Kong Stock Exchange. Red chip stocks are expected to maintain the filing and reporting requirements of the Hong Kong exchange, which makes them a primary outlet for foreign investors who wish to participate in the rapid growth of the Chinese economy. Red chips may be issued in addition to A-shares in the same companies, although only Chinese citizens can invest in A-shares.



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Full Definition of Red Chip


A red chip is stock of a company incorporated and traded on the Hong Kong Stock Exchange and controlled by mainland Chinese shareholders. Companies with red chip stocks are headquartered in Hong Kong and are sometimes managed by executives from Western countries. The concept of a red chip stock began in the early 1990s. After the improvement in the Chinese economy and easing of interest rates, red chip stocks began to benefit from the ensuing growth. Red chip stocks are conglomerate-like stocks of companies holding numerous assets of provincial or city governments in China. For example, the red chip stock company, Shanhai Industrial, has holdings in over 100 companies in Shanghai. Guangdong Investment, another red chip stock company, manages the commercial endeavours of one of China’s wealthiest provincial governments.


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Red Chip. PayrollHeaven.com. Retrieved April 04, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/red-chip/

Definition Sources


Definitions for Red Chip are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 6th February 2020.