Credit Research Of Chinese Stock Market

The credit is very important to the market economy.To the stock market which is composed by virtual capital it is the foot-stone. In Chinese stock market there are a variety of falsification and breach of faith which result in belief crisis.Now is the situation that the regulator,the public companies,the financial intermediaries and the investors will have no faith in each other.On June 6th,2005 the Shanghai Composite Index fell below 1000 .During four years bear market investors have losed almost $1,000 billion,and the heavy loss gives us a lesson that the stock market must build on the foundation of credit.The non-tradable shares is a big barrier.Now we are sweeping off the barrier and cherish a open,fair and justicial stock market.To make a sound foundation for the stock market the key is to rebuild the credit of the market,including the credit of the regulator,the redit of the public companies ,the credit of the financial intermediaries and the cultivation of the credit culture.This paper profoundly analyses the credit environment of the Chinese stock market by the use of credit theory,pointing out that the reason accounting for the lack of credit of the Chinese stock market is the unclearly established ownership of the property rights.Another reason is that the regulator makes his credit destroyed when he is sustaining the public companies.How to improve the credit environment of the Chinese stock market? This paper suggests that reforming the operating model of the state-owned capital is the fist thing concerned.The reform will make the regulator have no interests in the public companies which will make the regulator be qualified as a regulator.The construction of legal system is also important ,which establishes a punitive mechanism.