The Effect And Empirical Study Of Security Market On China's Economic Growth

The proportion of direct financing of our country is fewer than 10% at present, and the supply of the social capital comes from the bank basically. So any problems in the system of bank are bound to having serious influences on the safety of finance in China. To decrease financial risks utmost, the Third Plenary Session of the 16th Party Central Committee proposed to develop the capital market in a more cost-effective manner clearly, and perfect the financial regulation and control mechanism. As we known, 2006 is the deadline of China entering WTO, and then the financial field will fulfill the responsibilities of WTO in an all-round way, so whether the development of capital market mainly based on security market succeeding or not will, to some degree, have direct relationship with the future of finance and even the economic system reform in China. Security market in China, as a new developing one, has got more people's attention in the speed of development. At the same time, a variety of problems exist in the market. This paper aims at examining various kinds of problems of security market in China closely, and let us knows the development of security market and the effect on economic growth clearly.Firstly, this paper analyzes qualitatively the current situations on development of the security market in China and describes the influences on economic development of our country, especially dwells on the full play effects of the economy function of security market of our country. This paper finds the security market of our country has raised a large amount of capital for economic development, however the allocation of capital is less efficient, and the development level of security market of our country is still lower. Then the paper examine empirically the security market's effects on economic growth with Cointegration method in our country, and the empirical ending points out the conduction mechanism of stock market of our country is not smooth enough. So the impacts of security market on economic growth are still very limited at present. Based on it, this paper applies the Impulse response into analyzing further the long term dynamic relationship between the development of security market and the economic growth. The paper finds the expanding of stock market's scale keeps the same step with the sustained development of China's economy; however the enhancement of stock market's liquidity can not catch up with the sustained development of China's economy. So we should pay more attention to the improvement of the security market's quality of our country, not only the scale.The impacts of security market on economic growth are still very limited at present, which has great relations with the environment of economic laws ruling security market of our country and the defects of security market's own function mechanism. The development tactics put forward by this paper aims at the defects of system in the security market has a certain practical significance.