Research On The Bailout Action Of Chinese Government In The Stock Market

In 2015,the Chinese stock market experienced a huge crash.In order to maintain the stability of the stock market,the Chinese government directly entered the market as a‘national team'with a capital scale of more than one trillion yuan to rescue the stock market.Later,it will face the question of whether and how to withdraw a large amount of funds.The Chinese national team's bailout of the stock market has attracted the attention of all countries(regions)in the world,and has also provided important field experiments for the research in the field of political economy and financial supervision.This article focuses on this important empirical fact.The thesis is divided into eight chapters.The first chapter explains the domestic and foreign realistic background and research status of government intervention in the stock market,highlights the research significance,and introduces the content structure of the paper.The second chapter sorts out the existing literature on government intervention in the stock market.The necessity of the government to bail out the stock market is elaborated from the aspects of the characteristics of the stock market crisis and the government functions.The objectives,specific methods and policy effects of the government bailout strategy are summarized from the literature,and the establishment and operation of the stock market intervention fund are highlighted.The Chinese government's stock market intervention strategy and China's 2015 stock market crisis research progress and pointed out research flaws.Finally pointed out that the government's stock market intervention strategy exit mechanism is insufficiently studied.Chapter three,from the perspective of financial history,divides the way of government bailouts,and follows the timeline of major stock market crises.It compares the experiences of governments of various countries(regions)in bailouts since the 20th century,especially focusing on The government's strategy of direct capital injection into the stock market,detailed operation of the more successful stock market leveling fund,and summed up the differences in government intervention strategies of the stock market at different stages of development.Focusing on the Chinese stock market,the government intervention strategy since the establishment of the Chinese stock market is combed,and a detailed analysis of the rescue plan of the 2015 stock market crisis is provided to provide historical experience for the countermeasures of the Chinese stock market crisis.Chapter four analyzes the government's market entry strategy in combination with the typical characteristics of China's stock market.Based on the noise trading model,the government rescues the market from the aspects of the formation of the stock market crisis,the goal and strategy of the Chinese government's bailout,and the expected effect of market intervention.Conduct theoretical analysis of funds entering the market.On the basis of the theoretical model,put forward three theoretical hypotheses of the government's market entry effect.Chapters five and six are empirical analysis of the operation of the Chinese government's bailout funds and the effectiveness of strategies.Detailed statistics on bailout funds and subsequent adjustments are an important practical basis for bailout strategy research.Chapter five first focuses on the statistics of the 'national team'bailout funds with the central Huijin Investment Co.,Ltd.and China Securities Finance Co.,Ltd.as the main volatility in China's stock market in 2015,from the market background of funds entering the market and the raising of funds.The size,the structure of the market entry,the principles of stock selection,the dynamic adjustment of funds in the later period,and other aspects analyze the government's capital injection actions.And split and compare the holding members of the 'national team'to fully display the overall picture of the stabilization fund operation.Based on the three theoretical hypotheses proposed in Chapter four,Chapter six empirically tests the policy effects of the Chinese government's stock market bailout plan,from the improvement of market liquidity of bailout funds to the volatility of the market as a whole and the individual level of the rescued individual.The three aspects of the bailout fund's impact mechanism test were to evaluate the implementation effect of the government's bailout strategy.The seventh chapter is the research on the disposal of government rescue strategy.On the framework of the government's market entry model,the theoretical study of withdrawal discusses the goal setting,trading strategy,and expected effects of government withdrawal,and gives the necessary conditions for government withdrawal and the operation of position adjustment in the two-phase model.The strategy provides a preliminary mechanism design for the implementation of the Chinese government's withdrawal strategy.The second part of this chapter is based on the conclusion of the withdrawal model.Through the calculation of the investment cost of the bailout funds and the income level of each period,the timing of the withdrawal of the bailout funds of the 'national team' is pointed out,which provides a realistic basis for the withdrawal strategy recommendations.Chapter eight summarizes the research results and points out the future research prospects of this paper.On the basis of the history of stock market crisis relief in various countries(regions)and the conclusions of this paper,it proposes policies for the Chinese government's rescue strategy selection and the later operation of stabilization funds suggests.The main conclusion of the paper:In terms of market entry:The goal of the government's bailout is to stabilize the market,which is necessary and effective.It is reflected in the following aspects:the government provides additional liquidity to the market by increasing its shareholdings,reducing the market's liquidity risk.The government's stock market Intervention is conducive to reducing market volatility,and the greater the intensity of intervention,the lower the volatility of individual stock returns.Reducing the noise trading degree of stocks is the main mechanism for bailout funds to reduce the risk of stock market volatility.In terms of withdrawal:The large amount of state-owned funds stranded in the stock market has a negative effect.withdrawal is necessary.However,since the goal of withdrawal is actually more yuan than entering the market,withdrawal should be more cautious and strategic.Considering the government's preferences or trade-offs for different goals,in fact,there can be different strategies and opportunities for the withdrawal of government bailout funds during the post-crisis period.Assuming that the government's goal is only to balance the profit and loss of the funds entering the market,in fact,at the end of 2017,there has been an opportunity to withdraw completely.However,in fact,the government is still active in the stock market so far,indicating that the government's objective function of bailout funds may include the maximization of "investment returns" under certain information advantages.If so,the government's bailout funds theoretically have no definite optimal exit time or timing,and camera choice is the optimal strategy.The innovation or contribution of this article is mainly reflected in three aspects:Firstly,the government's intervention in the stock market is divided into market entry and exit,which are analyzed separately,especially the analysis of exit strategies.In reality,it is often very decisive to enter the market,and it is very troublesome to withdraw from the market,which requires special caution.The post-government disposal of the government directly determines the effectiveness of the intervention policy,but it is often overlooked in the strategy formulation and policy effect evaluation system.The issue of government bailout funds withdrawal was included in the government's intervention policy research on the stock market,and a theoretical design was made for the subsequent disposal mechanism of bailout funds,which to a certain extent made up for the government's 'visible hand' to withdraw from the bailout research The vacancy provides a withdrawal system design that can be used for reference by countries of various market types around the world.The prcmise of discussing the disposal of bailout funds is to grasp the actual operation effect of existing funds in the market,and to provide a realistic basis for the subsequent disposal strategy of bailout funds through more detailed accounting of the cost of bailout funds since entering the market and the benefits of each period.And provide policy recommendations for the mechanism design ofthe withdrawal strategy.Secondly,the government's intervention in the stock market is endogenously treated,and the objective function of the government's entry into the market is different from the objective function of withdrawal:the former is a stable market,and the latter's objective function contains investment return.Thirdly,the noise trading model has been improved.Based on logical deduction,three theoretical judgments are summarized and verified in empirical analysis.There are three main points in this article:Firstly,in the theoretical analysis,simplifying the goal of withdrawal as 'maximizing investment return' is indeed too simple and abstract,which is not in line with reality.In fact,the government and dual goals,namely investment income and stable market,have even more goals.However,because it is too complicated to determine the weight between different goals and build the corresponding model,the model construction exceeds my current ability,so only In-depth study later.Secondly,due to the limitations of data availability,in the statistical analysis,this article uses quarterly data to track the holdings of bailout funds,but quarterly data is difficult to capture the specific transaction time and price of bailout funds,resulting in bailout funds',the cost-benefit accounting may differ greatly from the actual situation.In addition to being supplemented by the asset account income of the investor's securities company,more data is needed to reflect the true income of the bailout funds.Thirdly,in the empirical analysis,this article only measures the intervention effect of government bailout funds by two criteria of liquidity and volatility,and does not consider the impact on market effectiveness.The mechanism of action of bailout funds is only to reduce noise transactions.Channel interpretation,indicator selection is relatively simple.