Research Of The Opening Of China's Stock Market

Concerning the misunderstanding of the opening of China' s stockmarket in academia, the author expounds some related theories and setsa further discussion on the significance and risks of opening the stockmarket as well as its possible running pattern, strategies, andtransitional system. The author considers "opening" and "globalization" as twodifferent conceptual categories of stock market. The opening of stockmarket, as a system arrangement permits overseas investors investing inChina while domestic investors participate in external stock market, isan indispensable stage of its globalization. It' s mainly concerned withfive aspects: to permit government, domestic enterprises and financial organizations issue securities which means to collect funds in external stock market; to permit overseas organizations and individuals trade in domestic stock market which means to approve overseas investment; to permit overseas organizations and individuals engage in domestic stock market on commission; to permit domestic organizations and individuals deal with overseas securities; to permit external or internal organizations deal with overseas securities in domestic market. Despite of great benefits gained from the opening of stock market,the article indicates that some problems such as weakening of thecompany domination, withdrawal investment maliciously, fluctuation ofthe stock market, risks of exchange rate and protection of newindustries are worth to pay high attention to.The author deems China' s stock market is still in the preparationstage of opening. Among the transitional system arrangement such ascoming into external stock market, issuing the overseas stock indomestic market, CDR and QDII, QFII is considered as the mostsatisfied strategy. In this article, the author compares Taiwan's changing situationsbefore and after its open strategy was carried toward stock markettogether with the strategies carry out in the Mainland China, and comesto a conclusion that it is more or less the same on the restriction of the open strategies in Taiwan as well in Mainland China. However, the difference exists in the different respects of controlling and managing they emphasize on. The article indicates that the governors shall pay particular attention on the special circumstances of the Mainland China while they draw lessons from Taiwan' s open strategies. There are a lot of differences between two stock markets. The author suggests the governors considering completely the influence of foreign capital upon our foreign exchange market while they maximize the chance of foreign capital participating in China' s stock market. The other thing is to protect the dealers of our stock market and the whole stock industry.