How to ravel out the conundrum restricting the development of China securities market.
Date of Issue2005
College of Business (Nanyang Business School)
As a product of China's reform and opening attempts, China's securities market has contributed greatly to the speedy and healthy development of China's economy. However, China's stock market has experienced series of sharp slumps since the policy of reducing state-owned shares through the secondary stock market was firstly launched by the government in June 2001. Shanghai's composite index dropped to 1259 points from 2245 points, the highest points, and the market value amounted to 1,500 billion yuan was vaporized, which caused disastrous economic loss to the investors. The article aims to thoroughly discuss the core reasons for the slumps of China's stock market and put forward the solutions. With the adoption of comprehensive management data analysis, capital market theory, financial management and securities market practices theory, statistics principles and related economic factors, combined with the through analysis of the reality of China's stock market, the conclusion is educed. It is the split of share holding right, over-financing, policy intervention, system defects that are the core problems leading to such a sever crisis in stock market.
Nanyang Technological University