China's Stock Market Bubble Study

Stock market bubble is an economic phenomenon that after sustained appreciation in stock, the market price of stock is higher than its real value. Stock market bubble can be divided into rational bubble and irrational bubble. The former is necessary to activate the stock market, and the latter will give rise to great harm to the stock market, even to the development of the whole national economy. Therefore, it is necessary for us to analyze the bubble level on our stock market. And according to actual situation of our stock market, we must analyze causes and look for solutions, in order to control the bubble level in the reasonable extent.The first chapter introduces the fundamental knowledge about stock market bubble, together with the connected fundamental concepts and theories. The second chapter mainly presents the known stock bubble events, from which we can learn the experiences and lessons in order to avoid the reoccurrence of alike events. The third chapter mainly analyzes, in theoretical and in practical aspects, the bubble level of stock market in China in resent years, and put the conclusion that the irrational bubble has arisen in 1996, 1997 and 2000, and especially in 2000, the irrational bubble is most serious. In addition, this chapter deeply analyzes the causes and the harm of the irrational bubble existing in our country' s stock market. On the basis of analysis of causes about the irrational bubble existing in our stock market, the last chapter puts forward some proposals or suggestions through taking advantage of some financial engineering thoughts and views, in order to prevent and control the formation of the irrational bubble.The article researches the bubble situation of our country' s stock market from the point of rational and irrational bubble. I hope it will give the related people some references.