The Approach Of How It Should Be Between Capital Market And Monetary Market In China

long period time of the monetary market and capital market in china is so late, separated and obstructed, no matter its liquidity and its management. But as a objective requirement of the economic rules, the two should be united as a whole and linked each other. They are the vein of the economy in a country. The paper shows the problems they are producing: poor effectiveness of the capital operation and financing, difficult to supervision, high cost of capital facility, finally the government macro-control and regulation of economy are weekend, the supervision and restriction are softened, and the performance of the management is lowered. To improve this situation the paper points out the methods of its correction.Firstly through the basic theory analysis the paper introduces concepts of the two markets in detail; using the theory of as sets selection of the top in the paper establishes the funds links between the capital market and the monetary market, based on the Gordon Model the paper expresses the relationship of the interests rate of the mending market and the stock price of the capital market; when clear the transmit lines of the risks among the different financial markets you understand the relationship of the two markets.Secondly contrast to the situation of other countries nowadays, our monetary market is not backward generally in the total amount, in variation extent our money system it is dependent to indirect investment heavily, but its internal sub-market is not balanced, especially non-market oriented bank loans, bank stub verification certificate are in 97% of the whole, so the risks are concentrated. It should turn to marked-oriented sub-more market or distributed ones.Finally the author describes the liquidity of the assets and funds and price, the main reason of our problems of the two markets stands on the poor of the currency, separated body, regulation arrangement and products innovations, the money flow is not smoothly.The classical monetary market of our country is developed very early, the banking system is a main funds facilities through debts-deposits-loan methods of the bank, and our capital market setting off in 90's has to connect the classical monetary market, so that it can get more funds to gain its own force and its own power.