Origin Evolution And Reform Of The Chinese Share Splitting Institution

Economy in China had obtained great achievement in the past 28 years, attracting the attention of the whole world. Dreams of China for thousand years, knowledge, experience and techniques already ascertained by humankind as well as painstaking efforts by all people had accomplished such an earthshaking miracle.Since the establishment of the Shanghai Stock Exchange on 19th December of 1990, Chinese Capital market has migrated just a little over 15 years. Nevertheless, it has traversed through a historical course equivalent to more than 100 years taken by the capital markets in Europe and America. This article researched the regularity of the changing of the Chinese share right splitting institution through describing and analyzing the formation, development, crisis and reform of the whole process of the Chinese share right splitting institution.The Chinese share right splitting institution was formed in the process of transferring the Chinese planed economy towards the market economy; it is not only the core and foundation of the China's capital market institution and a typical sample of the China's double-track institution, but also it possesses the characters of the Chinese integrated institutions as a transitional society. The Chinese share right splitting institution is a common cognition and a sharing faith; it is an endogenous institution developed to restrict participants of the market in a period of time. The market participants, around this special institution, will survive together and enjoy a common honor, they may rise and sink in the capital market, forming thus a series of mutually-promoting and restraining institutions to deal with various complicated relations of interests.On account of the fact that people always get benefits from the capital market but without benefits given, capital market will proceed to exhaustion, therefore the Chinese share right splitting institution will have no chance to avoid the crisis. The crisis of the Chinese share right splitting institution is not only the integrated crisis of China's capital market,is also the crisis of the double-track institutions. As a matter of fact, the double-track institutions had been arranged as an adaptive institution in the process of transition, it had played an active role; yet, in the process of transition in the Chinese society, it has become an obstacle. The cost of reform should be paid by the shareholders of the non-negotiable shares, this is necessary for the transition of the Chinese society towards market economy. If the cost is paid by the shareholders of the negotiable shares, it would mean a retrogression of the reform in China.It has been proved by the practice of reform that to put the Chinese share right splitting institution to an end represents the general trend and accords with the will of people. From then on, a new page will be opened in the history of the Chinese capital market to greet arrival of the era of complete circulation.This article mainly adopts the method of game theory from the angle of institution changing and comparison to proceed a deep investigation to the Chinese share right splitting institution.Preface of this article introduces mainly the background and meaning of selection of this subject, current state and inadequacy of study both within and out of China, train of thought and method of study, essential point of view and innovation as well as structural arrangement.In the first chapter, concept of the Chinese share right splitting institution is raised up and a brief theoretical explanation is given.In the second chapter, formation of the Chinese share right splitting institution is presented with analysis of the behaviors of the participants. This chapter, through investigating the origin of the Chinese share right splitting institution, together with the strategic interaction of the participants, analyzes the conditions and causes of the formation of the Chinese share right splitting institution. This chapter then analyzes the participants'expectations and behaviors, which have been influenced by the Chinese share right splitting institution.By using the game theory and the method of equilibrium analysis, this chapter reveals why the Chinese share right splitting institution has been able to exist.In the third chapter, mechanism and crisis of the evolution in the Chinese share right splitting institution are revealed. The main study in this chapter mainly investigates the special features in structure and the evolutional process of the Chinese share right splitting institution.It describes reproduction of the Chinese share right splitting institution, mechanism of motive power and mechanism of enhancement. From the angle of institution relevance and long evolution, this chapter reveals deeply the fact that the Chinese share right splitting institution represents concentration of information and generalized characteristics of the integral Chinese capital market. This chapter also analyzes the internal defects and crisis of the Chinese share right splitting institution associated with economic technical background both at home and abroad. In the process of the Chinese economic reform, the Chinese share right splitting institution had played an active role, but today it has become an obstacle to further development of the Chinese economy, therefore it should be reformed.In the fourth chapter, a comparison is made among various schemes of the Chinese share right splitting institution with an analysis of the practice of the reform. In this chapter, first of all, several trials in reforming the Chinese share right splitting institution are introduced so as to analyze the causes of their premature ending; then it is followed by explaining and analyzing the discussions of the Chinese share right splitting institution with several main schemes analyzed meanwhile with the author's scheme introduced. Through analysis of the Chinese share right splitting institution reformation and realization and by applying the game theory , an analysis is made to decide which scheme should be chosen for the formation of the equilibrium solution and characteristics of the route selection.In the fifth chapter, problems existing in the course of reforming the Chinese share right splitting institution and suggestions for overcoming them are presented. In this chapter, first is to point out some of the problems appearing in the course of reform of the Chinese share right splitting institution with analysis of the limitations of the current reform; following which favorable conditions and restricting factors in further reformation process are analyzed, and then countermeasures are finally raised to solve the problems.Through a description and analysis of the total process of formation, development, crisis and reform of the Chinese share right splitting institution, this article summarizes the regularity of the Chinese share right splitting institution changing, and build up a series of brief models to obtain experience, lessons and inspirations as well as to make a forecast and outlook for it.