A Research On The Causes And Countermeasure Of Chinese A-share Market Crash In 2015

In 2015,the most remarkable event in China's capital market is the performance of the A-share market. The market is bullish in the first half of 2015 and investors are excited very much. However the stock market plunges in the second half of 2015 and the stock market crash occurs in succession. Both the performance of the A-share market and the mood of investors are quite the opposite in the first half and the second half of the year 2015.The crash is rarely heavy, so it is necessary to find out the real reason why the stock market crash occurs. It can help the investors sum up experiences and lessons to avoid the same mistakes in future investments, and it can also help regulators formulate more effective supervisions of the market.In the first part, this paper reviews the process of the stock market crash in 2015 and the acts of government bailout in the crash, then this paper researches the causes of the outbreak of the 2015 stock market crash deeply. The direct causes of the stock market crash in 2015 are as follows :(1)The selling off stock in panic from the leveraged funds causes the trampling on each other in stock crash and the domino effect;(2)The liquidity crisis in stock market. The internal causes of the stock market crash in 2015 are as follows :(1)The leverage ratio of the A-share market is too high before the crash;(2)A serious imbalance between the long position and short position of the stock market exacerbates the market volatility,which boosts the development of the stock market crash.The crash in 2015 brings many effects to the A-share market in many aspects,therefore it is quite necessary to provide the countermeasure according to the causes of the crash which are researched in-depth in this paper. The countermeasure include suggestions for the A-share market as follows :(1)Regulators should reasonably control the stock market leverage;(2)We should continue to develop the derivatives market to provide more risk-hedging tools;(3)Regulators should lead the leveraged funds outside the stock exchange to grow in the exchange transparently;(4)Regulators should improve the system of the A-share market;(5)We should improve the ability and efficiency of collaborative emergency management among different supervision departments;(6)We should develop institutional investors vigorously to reduce the proportion of individual investors;(7)Regulators should regulate the behavior of the media to make them do the right things.