Interaction Between Capital Market And Industry Restructuring

As an crucial component of market system, capital market can promote the development of financing and investment, improve resources distribution, and optimize industrial structure. The reason is that capital market can divide up physical assets, therefore, assets can flow more smoothly and property rights can be clear. In addition, capital markets can also make resources used completely at lowest cost and fastest speed, thus promoting the allocation of resources. Thus, capital market is the best place to adjust the industrial structure, and implement industrial policies.China is in the transition from labor-intensive industrialization to capital-and technology-intensive industrialization, and the task of industrial upgrading is heavy. On the one hand, to achieve inventory of state-owned enterprises in particular the optimal allocation of the stock, we must encourage powerful alliances to encourage superior enterprises developing at low cost to achieve economies of scale; on the other hand, a sunset industry has not been timely adjusted, so that the entire industry has been in trouble with resources waste. In the process of industrial upgrading and transformation, an unprecedented dependence on the capital, and financial capital to the conversion of industrial capital is hard to the successful completion in the short term; the reorganization of the stock assets is not only difficult to get enough funds from banks, but also difficult to get help from the necessary reorganization of the mode of operation and system arrangements. In such circumstances, we must rely on the capital market to solve the problem.In the ages of knowledge-based economy, the competitiveness of existing industries depends on the improvement of technological progress and the improvement of technology. Since enterprises couldn't get enough money from bank loans due to characteristics of high-tech industries and commercial banks business limitation, indirect financing is widely accepted. Risk-lovers enterprises will develop by capital market, which has risk and profit symmetry merchandise.Therefore, in order to promote sustainable development of China, vigorous development of capital market is requested to improve efficiency of industrial restructuring, achieve industrial upgrading, and enhance competitiveness of industries.This paper is aim to analyze the interaction relationship between capital market and industrial structure from the following four aspects:Firstly, analysis of the economic functions of capital market. Capital market is a product of the modern economy and also an essential element of the market economy. Capital market guides resources to the most efficient sectors and areas by giving market price signals and promoting industrial restructuring. Capital market has some major functions, e.g. capital accumulation, property rights defining, resources distributing, risk allocation and pricing, technology and financial structure innovation promoting.Secondly, base on reviewing the trends of industry restructuring and evolution and the theory analysis, this paper focuses on the interaction of capital market and industrial growth, and gets the conclusion that: capital market provides intrinsic motivation and mechanisms to rationalize the industrial structure, a good incentive and motivation mechanism for innovation; provides implementation mechanism for industry restructuring through corporate restructuring; promote the development of the core enterprises to promote the upgrading of industrial structure; provides helps for the development of strategic industries and the formation of dominant industries, so as to promote industrial structure advancement; capital market provides a good recession mechanism for the adjustment of sunset industry.Thirdly, through the study of the efficiency of China's industrial restructuring obstacles (the lack of an effective transmission mechanism; constraints of institutions and market), this paper points out that industry restructuring must insist the market-oriented approach, taking the capital market as the impetus for the industrial structure.Fourthly, on the top of analysis of the capital accumulation scale and the effects of industry restructuring of capital market, this paper puts forward the development of Chinese capital market should be based on industry restructuring, promoting industrial upgrading and nurturing emerging industries. Because of the important role of the capital market in industry restructuring, this paper points out that we should increase the support for high-tech SMEs, at the same time vigorously develop capital market in western, improve the ability of the western region capital formation, promote the industry restructuring of the western.