The Impact Of China's Stock Market On Economic Growth

The global financial Crisis in 2008 shacked world financial markets severely, and China's stock market also decreased badly during the crisis. Shanghai Stock Index was down from its climax of 6124 points on Oct. 16th, 2007 to the valley of 1664 points on Oct. 28th, 2008. Meanwhile, China's Economic Growth was slow down apparently, and its growth rate was less than 10%, which was very rare in recent years. According to earlier written, this paper would analyze the impact of China's stock market on economic growth under the background of global financial crisis. The paper studied impacting factors of stock market to economic growth, and classified the factors as positive impacts and negative impacts. And then established the economic growth impact model including factors such as stock price, stock price volatility, stock market trading volume, and total market value of shares in circulation etc.. The study found that China's stock market had positive impacts on economic growth when there was no global financial crisis, while had negative impacts when crisis happened. Therefore, certain arrangements must be taken to reduce the negative impacts of global financial crisis on China's economy.The main body of this paper will be divided into the following five parts: Part I, Introduction, introducing some basic ideas of this paper; PartⅡ,Theoretical Overview, reviewing the theoretical basis of this study; PartⅢ, mathematical modeling and data processing, establishing an economic growth model including both positive and negative factors of stock market, and deal with related data accordingly; PartⅣ, Empirical Analysis; and PartⅤ, Main Conclusions and Policy Recommendations.