BEIJING - When the men and women aren't playing cards, they sit quietly in the dim light watching numbers flash across the big board, hoping their big bets pay off.
Some of the gamblers are wagering their life's savings, and most of the people are losing. Some of them also fear the odds are stacked in favor of the house - China's stock exchanges.
"I consider this state-sanctioned gambling," says Liu Xing Qu, 53, a retired factory worker who is one of nearly 70 million individual investors in the country's two stock exchanges. In the past year she has invested about $2,500, lost about $700 and thus learned one of the rules of China's new economy. "You can lose your money very quickly here."
Established in 1990 and 1991, China's two exchanges are in their infancy. Initially regarded by officials as a means of raising money for state-owned enterprises, the markets became the first opportunity for many citizens on fixed incomes to take some of their savings from low-interest bank accounts and participate in the country's capitalist reforms.
"I've got nothing to do at home, and I was thinking probably I can make some money here," Liu says, studying charts displayed on a computer terminal in the downtown trading center she visits every day. "I've never had investments like this and I want to learn something about finance."
The lessons have been painful.
Roiled by allegations of insider trading, stock manipulation and corporate fraud, the markets have yet to earn a reputation for being transparent or fair. Two years ago, a leading Chinese economist, Wu Jinglian, told the Chinese paper Southern Weekend that it was "common market practice" for well-connected investors and companies to manipulate stocks and exploit smaller investors. For the past year, China's exchanges have joined the world's markets in a downward spiral.
"You can't make money on the Chinese stock market. Everybody's losing," says Ai Zhongguo, a 50-year-old Beijing resident and retired state worker sitting in the lobby of Hua Xia Securities in central Beijing.
Ai's and Liu's investments are supporting state-owned enterprises - the same kind of companies that laid off many of the workers who became small investors. Historically a sluggish part of an otherwise fast-growing economy, state-owned firms have dominated the markets, using them to raise billions of dollars in cash.
An overwhelming percentage of the 1,200 listed companies on the Shanghai and Shenzhen stock exchanges are state-owned, figures not lost on the average investor.
"The one who benefits the most from the market is the government, I believe," Liu says. She cited a major state-owned telecommunications company that began issuing stock last week. "Unicom is going to issue 5 billion shares. Think about it. That's a lot of money that you give to Unicom."
Ai has invested his family's entire savings, close to $25,000, in state-owned businesses in the past two years. He has lost half, forcing him to delay a wedding for his 27-year-old son.
"We are here to contribute and devote ourselves and donate," Ai says tartly. "With all of our money put into state-owned corporations, who knows how many collapsing businesses we have saved and how much corruption our money has supported."
Such cynicism is easy to find in the trading rooms where people place buy and sell orders.
Compared with the floor of the New York Stock Exchange, the scenes at Hua Xia Securities are markedly subdued. Mostly middle-age and elderly men and women sit calmly in rows of plastic chairs sipping from glass thermoses of tea, their eyes focused on flashing red, green and yellow digits on the wall in front of them. Red is for stocks going up, green for stocks going down, yellow for those unchanged.
Some women in the back rows knit while other men and women play cards. Lining the walls are investors monitoring the markets on computer screens. In a room upstairs, investors with larger accounts sit at desks and watch still more screens.
Some retirees and laid-off workers come every day, saying they have nothing better to do at home. But the pace of trading appears slow, in part by design: If investors buy a stock one day, they are not allowed to sell it until at least the day after.
The markets have that rule because short-term trading is all too common. Unlike the long-established Hong Kong market, the Shanghai and Shenzhen exchanges have yet to become significant engines of investment - they are still markets for speculators.
"There are very few long-term investors in the market," says Nicholas R. Lardy, an expert on China's economy at the Brookings Institution in Washington, D.C. It is "more of a trading market than an investing market, but with very poor disclosure on the part of listed companies, what's the basis of trading? It becomes rumor-driven and is manipulated by insiders."
The combined daily volume of the Shanghai and Shenzhen exchanges, once in the billions of dollars, now hovers at about $600 million to $700 million, compared with roughly $40 billion on the New York Stock Exchange. The Chinese exchanges' total market capitalization, at $540 billion, is a small fraction of the NYSE's $16 trillion.
Some investors optimistically hope that the 16th Communist Party Congress scheduled for November will generate enough good news to push stock prices up - but no one knows what that news would be. For now, investors keep hoping to see red numbers flash on the board.
"I don't watch for a particular stock. I watch to see how the market is doing," says Zheng Wei Min, 48, whose eyes remained fixed on the trading room's big board. "It all depends on whether the people who run the market decide they want it to go up or not."
A former newspaper editor, Zheng says he has invested more than $35,000 since late 2000. He has lost two-thirds, mostly on a much-hyped state-owned real estate holding company that trades under the name Zhongguancun.
Zheng bought 5,000 shares of the company at roughly $4.50 a share more than a year ago. It now trades at $1.50 a share.
"It's all politics and speculation," Zheng says. "That's the essence of survival in this stock market with Chinese characteristics."