| During the transformation from the planned economy to the market economy in the mid and late 1980s, allocation mechanism of capital has greatly changed in China. Market-oriented financing began to replace the planned allotment by the government. Because Shanghai Stock Exchange and Shenzhen Stock Exchange could not satisfy the financing demand of companies at that time, the equity exchange market emerged, as the times require. Since then, the equity exchange market has come through flexuous development. And after that technology and equity exchange market emerged as the new form of the equity exchange market in the national range. However, many problems still exist and need to solve in despite of the development of the equity exchange market. The orientation of the equity exchange market in China's multi-hierarchy capital market is not clear; many equity exchanges are neither mature nor canonical; there are some "hot potatoes" in this market. The purpose of this article is to discuss the importance of the equity exchange market development in China's multi-hierarchy capital market and seek for the right way to develop the equity exchange market in China. The article is based on abundant literature and practice and has great significance for the development of the equity exchange market and the building up of China's multi-hierarchy capital market.The true value of the capital market lies on its efficiency. And the efficiency of the capital market is embodied in the process of transforming saving to investment. Considering the diversification of suppliers and demanders, the supply-demand equilibrium of the capital market must be achieved by subdivision. Thus, the multi-hierarchy capital market is in great need in order to fully exert the efficiency and effect of the capital market. According to the experience of the mature market, the capital market can be divided by two parts: the stock exchange market and the out-exchange market. The out-exchange market includes the OTC market and the third market. The OTC market includes the national market, the smallcap market and the OTCBB. The OTCBB is commonly called the third market, which is the extension of the growth enterprise market.In view of the content and function of the equity exchange market in China, it belongs to the capital market, but is greatly different from Shanghai Stock Exchange and Shenzhen Stock Exchange. The equity exchange market in China is an elementary form of the capital market and a non-public capital market. It has similar characteristics of the U.S third market, the OTCBB.After the analysis of the status of the equity exchange market in china's multi-hierarchy capital market, this article introduces the emergence, development and actuality of it. In a word, the equity exchange market derives from the economychange from bottom to top, and is the external need of the socialist market economy.But because of the demonstration effect of few successful equity exchanges, many areas set up equity exchanges, regardless of their actual economy status. Some areas, which were not provided with sufficient qualification, also set up equity exchanges. So equity exchange in China is quite disorderly, and this disorderliness harms the development of the equity exchange market. The income of almost all equity exchanges in China is negative, except in Shanghai and Shenzhen. Shanghai Technology Stock Exchange is profitable, depending on the policy inclination and Shenzhen Equity Exchange is at the balance. There are two reasons why the equity exchange market is run so poorly. One reason comes from the equity exchange itself: equity exchanges were set up unreasoningly; the supervision system is problematic; different equity exchanges lack communication. The other reason comes from the policy restrictions and the lack of policy protection. This reason is the main one. Document 10 of State Department in 1998 forbids fractionization, continuance and standardization of the equity exchange in the market. This act lowered the f... |
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