Study On Problems Of Foreign Financial Capital Investing In A Share Stock-Market

From the beginning of opening and reform to now, the economic development of China makes great headway. Comprehensive power of China has been enhanced ever-increasingly, in the same time the degree of market and opening goes further. After China joined in WTO successfully in 2001, our economy has to face up to many opportunities and challenges. Because finance field is in the vital position to the national economy, our government has implemented the strict management on the admittance to market in finance field. According to the WTO agreement followed by China, the mainland's finance market will open completely in 2006. So we should take advantage of these opportunities during the period of transition and make the preparation on all sides. Under this kind of background, the Administration of China has made the relative regulations about allowing qualified foreign institutional investors investing in A share stock-market.The meaning of the foreign financial capital entry into domestic market can be understood in different ways. For instance, B share stock-market is a channel into domestic securities market for QFII. The concept of "foreign financial capital investing in domestic security market "may be understood in the perspectives of the broad sense and the narrow sense .The concept in the narrow sense is used by this paper. QFII, a abbreviation of qualified foreign institutional investors, indicates a kind of pattern which allows qualified foreign institutional investors to converge some amount of foreign exchange fund under a certainty regulations and limitations, and transit to local currency, invest local stock market by strict special account, may transfer to foreign exchange and remit the capital benefit and bonus stock after the permission by the government.After the breakdown of the system of Bretton Woods, the practice of frequent international capital flowing impels the development of the theory of decided exchange rate. This theory is from the theory of purchasing power parity, the theory of interest rate parity, the theory of international income and expenses to the theory of asset market. But, at present, the theory of cost in exchanging specially used in our country is applicable. Following the relationships between the domestic and outside finance market strengthened, The theory of interest rate parity may play a increasingly important role in explaining the fluctuation of the exchanging rate of RMB. The efficiency of A share stock-market can be enhanced by the flowing of QFII, which can be explained by the theory of efficiency capital market from the perspective of the information disclosure. The high monopolization of domestic finance market structure leads to the shortage of the vigor of the market practicers and the bad performance, which may be noted by the SCP analyzing model in the theory of industry organization.The paper studies the problem of the foreign capital investing in A share stock-market. The basic way of thinking is as follows: Analyzing the foreign capital into A share stock-market theoretically, its results will be used to study the problem; Reviewing the experiences of the foreign capital into A share stock-market in some developing countries or areas and the regulations ofQFII in china, their identities and differences will be laid out; Analyzing their coming effects in order to show their great significance; then studying the problems faced up by us after the foreign capital entry into A share stock-market and the reasons in order to reveal the present situation in the domestic securities market and foreign exchanging management. At last, putting forward the relative counter-measures. The studying method is to combine criterion analysis with demonstration analysis.The followings are the main conclusions of this article.1. The QFII regulations of the mainland of China have been built by learning from the relative experiences in some developing countries or areas. But they have some differences, which caused by the different conditions in the market home...