No Arbitrage Equilibrium With The Chinese Stock Market Validity

After stock market producing, the relationship between stock market and economic growth has been brought into the visual field of the economist. However, studying the relationship with the tool of the modern economics systematically only happened in several decades. Especially after 90's in 20 centuries, along with the deepened developing of the new financial development theories, the economists start to investigate the relationship between the stock market development and the economic growth from different aspects more deepened and systematically. These researches doubtless provided a certain theory basis for us to comprehend the function which stock market played in the growth of economy.Since the establishing of Shanghai and Shenzhen stock exchange respectively, the development of the Chinese stock market has already had the history of more than 10 years. The stock market scale is continuously becoming strong and normative, the market innovation is continuously deepened , the stock market information is continuously published perfectly ,the scale of organization investors is continuously strong ,China joined the WTO and inducted QFII. All above factors make the Chinese stock market speed to be in line with the international market. The existence space for speculation has already been compressed consumedly. The equilibrium of stock price no longer transfered with the will of market main force . The healthy development of stock market provides a powerful support for the development of economy .This text plans to combine the foreign mature theories for the stock pricing(the capital asset pricing model and the arbitrage pricing model) and Chinese stock market .It takes advantage of the inside consistency of the two models and the stock market's efficiency to test the validity of the Chinese stock market by testing the capital asset pricing model and the arbitrage pricing model .Its practicing significance can not only contribute to understand the size of stock pricing information which included in the domestic stock market but also provide beneficial thinking which can heighten the pricing efficiency in the domestic stock market and can help to make the corresponding investment strategies. This text firstly states the pricing and efficiency theories in western stock market. The development of the western stock market has the history of more than 200 years. There are various stock pricing theories and methods in the theory field and practice field. Its results had already formed tight system .Secondly, this text combines Chinese stock market state to provide its researching method system based on the demonstration researching results which already had home and abroad. It uses the result of substantial test to the market to make a judgment for the market efficiency by comparing the two models. This text focuses on the exchanging data during 1999-2004 in Shanghai and Shenzhen stock exchange. It carries on a test to the CAPM and the APT by substantial analysis and gets a conclusion that Chinese stock market now is near to the stage of weak-form efficient market .It also puts forward viewpoints to the existent problems in the reality and brings forward reasonable suggestions for the later development .At last, it gets its conclusion.