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The Study Of The Functional Efficiency Of China's Futures Market

Posted on:2006-12-16Degree:DoctorType:Dissertation
Country:ChinaCandidate:G Z QiFull Text:PDF
GTID:1116360152491228Subject:World economy
Abstract/Summary:PDF Full Text Request
October 1990 marked the inception of futures market in New China. But before the year of 1994, the economic system was on an infant stage of its transition—lower level in the market economy development, under-developed cash markets, insufficient legal structure, lack of experience in regulation, etc. As a result, futures market, rampant with problems such as over speculation, prevailing risks, illegal overseas trading, headed into a dark alley and left a solemn lesson. In 1994 and 1998, China Securities Regulatory Commission waged two campaigns to clear up the futures market. The campaigns bore some fruits. Since 2000, in government' s perspectives, futures market has been a significant part in its agenda of improving market economy structure. With the all the policies in place, futures market has gained a noted momentum. Between 2000 and 2004, the total market trading volume enlarged by 800%. However, for quite a long while, there has been a prevailing vague notion among all walks of society about the functions of China' s futures market. The notion has exerted a glooming impact on the decision making of government' s macro policies and corporate micro policies. Therefore, how to evaluate the functions and effectiveness of China' s futures market, how to clarify the factors that constrain its growth and how to propose the targeted and feasible solutions are the subject that is of economically practical value.The research unfolds from two angles. One is to study the approaches that evaluate the functional efficiency of China' s futures market; One is to study the defects of functional effectiveness and the solutions. The paper has nine parts and contents are mainly as follows:Chapter 1 is the general argument that demonstrates the theoretical practical implications of the selected subject, so as to find out the research foundation and inception point, introduce the subject of study, scope of study, approaches of study, Structural arrangements and the main innovation.Chapter 2 is the theoretical foundation of futures market' sfunctional efficiency. It introduces economic theories that are used in the research, including cobweb theorem, warehousing theory, traditional hedging theory, dynamic hedging theory, effective market hypothesis, and the implications of ARCH and GARCH model, their basic thinking and the application in securities and futures market research.Chapter 3 applies GARCH model and other empirical analysis approaches in a scientific evaluation of the functional efficiency of China' s futures market. Afterwards, it analyses the several defects inherent in the current futures market, and identifies several issues that the paper focuses and intends to solve.From Chapter 4 to 9, it addresses respectively the specific issues that influence the market' s functional efficiency and, based on the global practices, proposes the advice on policies that is targeted at solution of the problems. Looking from the broader perspectives, level of market economy development, adjustment and control policies on macro-economy, market credit base, regulatory and legal environment and the other factors are the basic conditions under which market can be truly functional. In a narrow sense, the structure and operational system of the market will also seriously hamper market' s functioning, such as product structure, investor structure, delivery procedures, clearing procedures, market organization procedures, risk control system, etc. These defects, with no exception, will influence the efficiency of the functions of futures market. In the 6 chapters, through the comparative research between the domestic and international markets, and on the six key factors that bring about the defects of market' s function efficiency, some new theories, mechanisms and approaches are proposed that are both in accordance with the global practices and not alien to China' s actual characteristics.The research sticks to a multi-angle and holographic approach and avoids being isolated, still and partial. It intends to grasp at the internal rules, essenti...
Keywords/Search Tags:futures market, functional efficiency, hedging, price discovery, mechanism innovation
PDF Full Text Request
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