China's Stock Market, Moral Hazard And Its Countermeasures

Stock market originates from stock company, which is one form of organization. It developed along with the modern capitalism and verified to be compatible with modern market by the practices. The stock market in China is one of the most significant phenomena since the implement of the policy of reform and opening to the outside world. In more than a decade, the stock market in China grows out of nothing, progresses from small to large, and develops rapidly from regional market to national market which is beginning to take shape. The stock market in China has experienced the process which the developed countries had experienced in hundreds of years, and is promotting the construction of market economy system in China to a brand new height. However, there's no denying the fact that the stock market in China is still immature for the existence of a great deal of non-canonical, immoral phenomena, such as low-down transaction, market manipulation, false presentation, fraud on client and so on. These immoral conducts break the just order of market, damage the benefits of investors, especially the ones in medium or mini type, and influence heavily the healthy growth of the stock market.There are various sources leading to the immoral conducts mentioned above. Specifically speaking, the severe asymmetry of information provides soil for those immoral conducts to grow; the irrationality of system enables the incomes of immoral investors to be legalized superficially; the incapability of market supervision is unable to bring immoral investors to justice; and the apathy in moral sense is the psychological origin of the omnipresent immoral conducts in the stock market.In order to eradicate these immoral conducts and realize the openness, fairness and justice of the stock market in China, we must put forward some strategies from the point of the morality. First, we should construct moral system of the stock market and moralize the entities of the stock market. Specifically, fundamental norms of the moral system include: giving consideration to morality and profit simultaneously, honesty andcredibility, publicity and transparency, observing discipline and obeying the law. Secondly, we should shape the moral entities of the stock market by means of internalizing morality and damming up a psychological dam to prevent the entities of the stock market from the immoral conducts. Specifically, these consist of setting up good images of the stock companies, cultivating the professional ethics of the agencies, improving the moral standards of the supervisor, and proposing rational investment of the investor. Thirdly, we should optimalize the moral circumstance of the stock market so as not to provide the objective conditions for the entities of the stock market to carry out the immoral conducts. Specifically, these contain completing the security system and reinforcing the supervision of the stock market.