Research On The Absence Of Functions Of Stock Market In China And Governmental Action

As the primary components of capital market, stock market was the product of market economy, it has a close relationship with economic development. Economical basis determines the degree of stock market, and meanwhile, stock market has a great reaction on the real economy. The more mature the stock market is, the more great the positive reaction will be, which is just the function of the stock market. We can dope out from the developing process of mature market that the stock market was not born with all the functions, but improving gradually. Stock market has various functions in different stages. We can sum up the functions of stock market in four aspects as follows: function of financing (raise money); function of investment; function of resource allocation and weatherglass of economy. Stock market of China is about three hundreds years behind the developed ones. Although it is only fifteen years old, with the experience of developed countries', our stock market has made achievements that was achieved by hundreds years of hard work in developed countries. It played an important part in the economic development, especially financing for reform and development of State -owned enterprises. After all, stock market of China is a new market from special background between planned economy and market mechanism, it has much faultiness. for instance, its functions of investment,resource allocation and weatherglass are seriously absent. I think that except for some objective causes, the unconscionable governmental act and the ill-supervision are inescapably responsible for that. So, to improve our stock market, the government should enhance the supervision about the listing and delisting,disclosure and dividend policy of listed company. Moreover, the government also should prompt the quality of listed company and guide the investor to invest rationally by some introductory act, so that all the functions of stock market can work well.