The Research Of Linkage Between China's And Global Stock Markets In The Context Of Economic Recovery

With the economic integration more and more deepening, the stock index becomes an important economic index. The global stock indexes show a strong linkage trend in recent years. Especially, the linkage between the developed countries'stock markets, such as USA, UK and Japan etc. with the gradual development of China's capital market, there also shows a strong relevance between China's stock market and global stock markets. Especially in the financial crisis, the global stock markets fell sharply; China's stock market has been hit badly, which makes people more concern about the linkage about China's stock market and the global stock markets. So this paper, which studies the linkage between China's stock market and the global stock markets in the context of global economic recovery, has the practical significant. The investors can take timely and reasonable measures based on the stock relevance, and the authorities can make important instructive policy to avoid the financial crisis.This paper studies the transmission mechanism between global stock markets and China'stock market, and studies the pathways that lead to the linkage between them. Combined with China's economy and global economic situation, this paper manages to give the reasons about the linkage changes between China's stock market and the global stock markets. In the context of economic recovery, this paper gives the reasons why the linkage coefficient changes between China's stock market and global stock markets from four factors, such as: the changes of trade, financial markets, national policies and people's expectations etc. based on the transmission mechanism, this paper makes empirical analysis on China's and global stock daily index from March 2009 to July 2010, this paper using the main method is correlation coefficient test, granger causality test and impulse test. This paper also uses Gray Test to measure the correlation coefficient between China's stock and global stock in order to stress the change of correlations coefficient from the time of before economy recovery to the time of economy recovering, and manage to give some reasons about the changes.The conclusion can help to inspire regulation bureau and financial institutions. When disastrous comes, the regulation bureau should take immediate actions to react to the disastrous, such as the rescue plans. To financial institutions, they should pay attention to the global markets as well as local market, took relevant trading strategies and manage risk properly.