The Research Of Structure-Function-Efficiency Mechanism Of Chinese Stock Market Evolution

As an important institutional innovation, the creation and development ofChinese stock market contains the inherent logic of Chinese economic system reform.This paper found defects exist in China’s stock market structure. the specificperformance as follows: Investors’structure is irrational; The scale of institutionalinvestors is small; Investors still mainly make short-term investments; And it lacks ofreal long-term investors; The industry structure and regional distribution of listedcompanies are not balanced; The trading tools of stock market are single, thedevelopment of objective structure is imbalance; The stock market intermediarystructure is not perfect enough, there is no market maker; The effectiveness ofsupervision and law enforcement efficiency need to be improved. By the analysis ofChinese stock market’s function, we found that stock market investment ability isweak, and financing ability is not strong, the allocation of capital is insufficient. Bythe analysis of capital allocation efficiency of Chinese stock market shows that:whether the issuing stock market or the trading market, the capital allocationefficiency is in low level, and overall, issuing market allocation efficiency is higherthan the trading market. The empirical analysis of the relationship of structure andefficiency of Chinese stock market shows that the main body structure of the Chinesestock market has positive influence to the capital allocation efficiency. The increaseof market capitalization ratio of institutional investors represented by fund leads toincreases of capital allocation efficiency of Chinese stock market. Improve theproportion of individual investors will reduce capital allocation efficiency of Chinesestock market instead. The objective structure of Chinese stock market has negativeimpact to the capital allocation efficiency. The increase of circulation ratio of Ashares market value will reduce the capital allocation efficiency; The increase ofcirculation ratio of B shares market value will increase the capital allocationefficiency.This paper established a suitable evolution model for China’s stock market. The“invisible”hand of the market and The“visible hand”of the government，the“twotactics”promote the evolution and development of China’s stock market . On theevolution mechanism of stock market research we found that participants in the stockmarket, the pursuit of interests is the stock market evolution motive power; Competitive pressures of participants in the stock market initiate mechanisms ofadaptive learning; Adaptive learning excites technique and system evolution; Themain dynamic game between the participants makes the realization of the technicalinnovation and the choice of system; By The Synthesis of structure - functionmechanism and structure-efficiency mechanism of China’s stock market, we draw thestructure - function - efficiency mechanism ( SFE system ) of China’s stock marketsystem evolving. The five mechanisms for evolution of logic, of circularcross-section, together to maintain the stock market evolution.Finally the paper gives policy recommendations as follows: Deepening thereform of distribution system, constructing multi-level market, and graduallyperfecting transaction objective system of the stock market; Strengthening theeducation of investors, encouraging organizational innovation of investors, andgradually perfecting investment main body system of the stock market; Expanding thenetwork of trade, encouraging technological innovation, and gradually improvingtechnology platform of the stock market; Striking price manipulation, safeguardingthe stability of the market, and gradually perfecting trade mechanism of the stockmarket; Strengthening information disclosure, strengthening the social supervision,and gradually perfecting supervision system of the stock market.