The Research On Quality Of Chinese Stock Market

Chinese stock market has been developed just for about ten years. While NYSE has a history about two hundreds years and Hong Kong stock exchange has been existed about one hundred years. So Chinese stock market is much younger. During its initial stage, the successful management experiences of other countries stock exchange are used for reference, which promotes Chinese stock exchange development and saves a lot of time for us.Stock exchange is usually called" the thermometer of national economy". It almost influenced every profession of the whole national economy, especially in the countries who have developed financial market. In addition, during the recent twenty or thirty years, stock exchange developed quickly. The importance of stock exchange is growing gradually in the world. As the important component of financial market and system, stock exchange influenced economy strongly day by day, which laid the groundwork for studying the quality of stock market. To keep abreast of the quality of Chinese stock market, the stocks in Shanghai stock exchange and Shenzhen stock exchange are analyzed practically. Then the structure of this article follows. In chapter one, the concept, the content, sense and trading mechanism of stock market are introduced. When touching upon the trading mechanism of stock market, some important foreign stock market and Chinese stock market are introduced. In chapter two, three economic meanings of bid-ask spread are analyzed. They are transaction cost, inventory cost and information cost. While in China, bid-ask spread just has two economic meanings, transaction cost and information cost. In chapter three, the impact of spread, depth, tick size and price limits on liquidity is studied. In chapter four, volatility, transparency and efficiency are studied. The factors that impact on volatility, the advantage and disadvantage of transparency and the reasons of efficiency are analyzed. In chapter five, liquidity and volatility of Chinese stock market are studied practically and the satisfying conclusions are drawn. In chapter six, according to forenamed liquidity, volatility, transparency and efficiency, Chinese status quo are analyzed and suggestions are put forward against some questions.