China's Stock Market, External Factors That Affect Analysis

From the end of the 1980s, the center of our economic reformation began to transfer from giving out authority to the innovation of system. Under the circumstance, a great deal of new stock enterprise came forth and the building of unified securities business is stared in the face. So on 19 December 1990, ShangHai stock exchange came into existence. And on 3 April 1991, ShenZhen stock exchange was also build up. The function of the two stock exchange became the most important exordium of the development of our securities business. The stock market occupies an important status in the securities business. In the west, the stock market is called the rain glass of national economy because it can change before the change of economy period. However, the fact of ours hasn't reflect it. From 1998, our GDP has always gone up 8%, normally, the basic face of economy should be propitious to the placidity development of our stock market. But the fact is the true deviation of our stock market from the basic face of economy. Up to March 2005, ShangHai stock index has failed under 1200. What's the reason? Aiming at this question, the text investigates the following five parts:The first chapter. Through the multianalysis, it can be concluded that the stock index is affected more by the supply than the demand.The second chapter. Cointegration is used to analysis the relationship of the stock index and the factors of the macro-economy. The result is the deviation of our stock market from the basic face of economy.The third chapter. Based on GARCH—M model, there is a faint minus relationship between the stock index and the rate; the m2 has a notable positive effect on the stock index.The fourth chapter. DOWNS, HANGSENG and SINGAPORE are correlated with our stock index. HANGSENG has a more effect on ours.The last chapter. The text established the dummy political variable equation, the m2 affects the stock index most; the supply affects the stock index least; the government variable has a minus relation with the stock index on the small side.