Research On The Positive Functions Of Stock Market To Economic Growth In China

It is important that stock market came into being and got great development in Chinese economic reform. In over 10 years Chinese stock market has held the balance in national economic and had more and more positive effects on economic growth. However, there are still some problems in stock market which block its functions and its running, thus influence national economic growth.This paper begins with a basic problem "whether stock market associates with economic growth", but not only rests on this relation analyses in the whole research. It focuses on the particularity of positive function of stock market to economic growth in Chinese economic transitional period, which is based on the problem motioned above. In theory, it sets up a model based on functions of stock market to demonstrate the mechanism how the stock market accelerate economic growth from saving, investment and financing mechanism. In empirical aspect, it analysis the relation of stock market and economic growth, reviews the functions of stock market from macro and microcosmic angles. Stock market has made great effects in macro-aspect by promoting the transformation from saving to investment. But in microcosmic aspect, though list companies are in good order as a whole, their profit are no better than others, and the efficiency of cooperate government is low thus could not improve their performance and profit. The purpose of M&A is to ensure list qualification and SPO. So it is hard to optimize resource collocation. As a result, the efficiency of resource collocation in Chinese stock market is low. From the analyses of the difference of macro and microcosmic function, we can conclude that the source of low efficiency of stock market is institution problem. In the early stage, the institution arrangement of stock market is incomplete because of the limitation of original condition. Some old institutional factors still affected market running, which reduce its running efficiency and thus weaken its function of resource collocation greatly. And the choice of Chinese stock market development is a kind of spanning-model, with national credit substituting for market credit, in order to spurthe development of stock market. With the development of market, it is very difficult for national credit to adapt the trend of market and internationalization. So the institutional shortages of compelling change are blown up, thus institutional risk is came into being and strengthened. It is inevitable that the stock market came into being and developed quickly in the course of economic transition. The policies to support finance development from stock market by the government gain great achievement obviously. So it is important to try to find out the develop model of stock market which accelerates the economic growth and make the stock market develop normatively and internationally with the request of market. The development model of market should change from government control to market deciding, the function of market should change from raising money to multi-function, and the purpose of stock market should change from serving with SOE to serving with national economy.