Study On The Establishing Of China's Second Board Market

Small and medium-sized enterprises contribute much under the development of China; so, their healthy growth will have a great impact on the stabilization and development on China.However under the financial system of China nowadays, media of financing for small and medium-sized enterprises are limited. Financial difficulties are the main obstacle causing the further development of China. To overcome the financial difficulties, providing ways for risk investment to withdraw, to promote the industrial structure and to enhance the comprehensive economic power of China, setting up a second board market is necessary This thesis is referred to some related theories and references, and to compare and contrast the second board markets of different countries. To analyze the problems that might occur in setting up a second board market in China and to comment on the appropnate countermeasure.In my opinion, there are five problems in setting up a second board market in China: l.Government interference or lack of control; 2.Reliability of information; 3.Over speculation; 4.Lack of institutional investor in the stock market; 5.Lack of intermediary service.To advance economic development of China such as technological industrialization and to overcome the financial difficulties of small and medium-sized enterprises, the following procedures might solve: 1. Immaculate the legal system, as to fully utilize the market system; 2. Perfect the system and means of security regulation, 3.Standardize the system for information provider; 4. Develop more institutional investors; 5. Apply the market maker system; 6. Enhance intermediary service, 7. Open the market for foreign investment.