China's Stock Market Segmentation Research

With its greater impact on economy, China's ever-larging stock market has been in process for over ten years. For institutional reasons, market segmentation has been a hot issue in China: The stock market consists of A-share, B-share and H-share simultaneously, with varying prices. B-share and H-share are at discount. Price system is disordered; information is distorted; control of market on listed companies is weakened: All affect stock market's performance.After an analysis of basic stock market structure in China, this text explains what market segmentation is and its behavior in both international and domestic markets. Based on conclusions of related researches, this text explains the reasons of market segmentation and its effects, finally leads to the necessity of solving this issue.Market segmentation in China stock market has its special features, thus barriers may exist in solving this problem. By experiences from other countries or regions, China can find its own ways and measures to eliminate market segmentation and further the integration of stock market.