| Since China’s stock market to be published, it has been developed for20years. During these times, it has made tremendous achievements. By the end of2010, Shanghai and Shenzhen’s total market capitalization was2.6523trillion yuan, which was the second highest in the world, and the ratio to China’s GDP was as high as66.16%. The pace of development is really fast. But it is too much emphasis on the pace of development, while ignoring the quality of development, resulting in the stock market has accumulated many contradictions, these contradictions have begun to restrict the long-term healthy development of China’s stock market. In theory, there are some positive contacts between the stock market and macroeconomic. In recent years, China has maintained a high economic growth rate, but the stock market continues to slump. They are showing an uncoordinated development trend. Because of this, the stock market has been criticized. In this regard, when the community evaluate or describe China’s stock market, usually call it a volatile stock market, serious bubblization stock market or the stock market full of speculation. Then, is China’s stock market really so?Intuitive absolute data seems to indicate that the volatility of China’s stock market is unusual dramatic. However, based on the international perspective, is the volatility of China’s stock market still so dramatic? In this paper, we use simple standard deviation and GARCH-M model to compare the volatility of China, the United States, Germany, Singapore, Taiwan and India. In the analysis, we divide to three stages by the implementation of the QFII system and the completion of equity division reform. Calculating the different stages of the stock index standard deviation shows the volatility of China’Meanwhile, GARCH-M model shows:compared to several other countries and regions, the volatility of China’s stock market is high indeed in the past, new information would bring a strong impact to the stock market, the volatility coefficient a is0.284, almost2or3times larger than the other countries and regions in the sample; however, since the implementation of the QFII system, the volatility of our stock has dropped significantly, the a of Shanghai stock is0.064, as much as U.S, Germany, Singapore and Taiwan, and much lower than India; after the split share structure reform is basically completed, the volatility of China’s stock market has been further reduced, a is only0.054, which is the lowest of all the countries and regions in the sample. Thus, compared with other countries and regions, China’s stock market is indeed volatile in the past, but with the implementation of the system, the stock market is constantly tend to improve, its volatility continue to show restraint, the current situation is not really so volatile.This paper also analysis the degree of China’s stock market bubbles. By analyzing the price-earning ratio, which is recognized as the most convincing indicators on analyzing bubbles in the stock market, we can find:from the view of the overall stock market trend, China’s stock market price-earning ratio was a downward trend; from the view of compare to the international stock markets, China’s stock market price-earning ratio is not ridiculously high; from the view of the essence of stock market price-earning ratio, a reasonable level of China’s stock market price-earning ratio should be higher than the developed markets. This preliminary indicate that China’s stock market is not full of bubbles. This article also uses the residual income model to measure the degree of China’s stock market bubbles. We find that China’s stock market is just too much foam in the number of years. Weather in terms of absolute stock market bubbles or relative stock market bubbles, we can’t come out the conclusion that China’s stock market is full of bubbles.While China’s stock market is not volatile stock market or serious bubble stock market, but we still can’t call it normal, specification market. Because the mainstream behavior in China’s stock market is speculation, but not investment. We can call it speculative-led stock market, which we have used theoretical analysis and empirical analysis to prove so. First of all, we analysis the speculative of A-share market, we see the indicators such as dividend payout ratio, dividend yield and financing dividend ratio, China’s stock market cash dividend level is low, this means it lacks ofInvestment value; the high stock market turnover indicate that investors are more interested in short-term speculation rather than long-term investment; at same time, wealth effect and invest effect in China’s stock market are extremely weak, in the long run, the elasticity of Chinese urban residents’consumption to the value of flow share is-0.014. Strictly speaking, there is a slight "crowding effect", roughly speaking, it means that China’s stock market does not exist any ture sense wealth effect. The elasticity of fix assets investment to the value of flow share is0.07, while to the loans from financial institutions is1.01. Compared to the pulling of credit for investment, the pulling effect of stock market is almost negligible. This is fully proved that China’s A-shares market is a really speculative-led stock market. Secondly, we also analysis the speculative of the GEM market in China, we find the GEM market is still serious in financing and light in return, at the same time, we find that funds are inefficient used and company executives willing to sell shares, these shows that the GEM market in China is also a speculative-led market.Further studies revealed that the reason why China’s stock market is led by speculative behaviors. That is not caused by the investors, the main reason is the irregularities of the listed companies, or we can say that the listed companies generally keen to misappropriating. The fundamental reason is that there are some obvious defects in the system arrangements. The speculative-led stock market is a very dangerous market, it will bring serious harm to the investors, listed companies and the national economy. In this regard, base on the institutional change theory, we give some short-term and long-term countermeasures to change China’s speculative-led stock market to the standardization one. We believe that in the short-term, the government should control the scale of equity, strengthen the bonus system of listed companies, introduce the delisting system of the GEM market and increasing the amount of illegal cost; while in the long-term, stock issue registration system should be implemented, improve main board delisting system and shareholder derivative suit system. At last, the government needs to transform the financing model of the whole society to co-ordinate the development of capital markets. |
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