China's Securities Market, Government Intervention

The Study is focus on the interference with stock market of government. We are interested in the cause,effect and trend of the government's interference. We focus on the effect of interference to investors and stock market. We hope our conclusion can be reference to government's policy decision and to investor's invest decision. We also want to explain some strange investors' behaviours by our conclusion.The dissertation is divided into six chapters. It consist of as follows:Chapter one "Introduction" .This chapter major introduces purpose and framework of the dissertation.Chapter two "Summarize literature". This chapter review some financial theories and Game Theory that are used in the dissertation and explain the use of these theories in the dissertation. This chapter simply introduce the theories of Expectation,Game ,Behaviour Finance,Efficient Market,the risk attitude of investor,Bubble,manipulation of stock market.Chapter three " analysis local government's interest in stock market" . This chapter describes special rulers of Chinese stock market and special environments of system, explains the relationship between local government and corporation getting the list of market. We find this special relationship will make stock market inefficient. The initial purpose of development stock market is for the sake of reform of state owned enterprises. Before China Securities Regulatory Commission (CSRC) abolishing the regular of quota of financing of corporation of coming into the market in 2000,before cominginto the market, Chinese enterprise must visa the following process: CSRC sends the quota of financing to local governments, enterprises apply, local governments chose the enterprise accord with the regulations. Because the corporations traded in the market burdened with the task of employment,tax,fulfillment the economy plan of local government, the local governments care not only state owned enterprises but also the corporations traded in the market. Moreover corporations traded in the market can quickly finance a lot of capital, which can relieve the want of invest of local governments, so local governments try their best to maintain the qualification of corporations traded in the market.Chapter four "The feature of Chinese investors" . Unlike the investors of mature stock market, Chinese investors have special features. From aspect of structure, at first the investors of Chinese stock market are individual investors. With the development of stock market, institutional investors grow very fast. From aspect of risk attitude of investors, because exist of Agent-Principle problem, most of institutional investors are potential risk seeking investors, for example securities invest funds, securities corporations, enterprise. Of cause some institutions with fine systems of obligations and promptings are probably risk neutral or risk averse. From aspect of invest strategy, individual investors tend to follow the institutional investors' invest strategy, while institutional investors usually profit from manipulation of stock market. From aspect of invest information, individual investors are uninformed investors, some of institutional investors are informed investors or manipulated investors or information seeking investors. From aspect of outcome of game in the stock market, individual investors are losers at most of time, and manipulated investors sometimes are winners, sometimes are losers.Chapter five "The aims of stock market of government and the government's control in the stock market" . This chapter explains the government's aims and how to intervene in the stock market when the development of stock market out of governments' expectation. The government's aims of stock market are as follows: serving for state owned enterprises, finding new ways of financing for help state owned enterprises, maintaining the justice of thestock market, developing normative agencies in law, improving efficiency of stock market. When some of government's aims aren't after governme...