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The Chinese Stock Market: Development and Prospects

Author

Listed:
  • Xiangmei Fan

    (Business School, Hunan Normal University, PR China)

  • Yanrui Wu

    (UWA Business School, The University of Western Australia)

  • Nicolaas Groenewold

    (UWA Business School, The University of Western Australia)

Abstract

This paper reviews the history of the development of the Chinese stock market, analyses the market scale and structure, and sheds light on the prospects of the market. The development of the stock market can be classified into four stages, namely, the early stage of stock market development (1983-1991), the transition of the regulatory system (1992-1996), the Red Chips craze and the deflation (1997-1999), and WTO entry and state share reduction (2000-present). We argue that the current structure of China’s stock market is unbalanced and that this has important repercussions on the performance of listed companies and the further development of the stock market. Solving the problem with the poor liquidity of non-tradable shares is a particularly urgent task. As China is expected to maintain its current economic growth momentum, the prospects are that the Chinese stock market will continue to expand in the coming decade.

Suggested Citation

  • Xiangmei Fan & Yanrui Wu & Nicolaas Groenewold, 2003. "The Chinese Stock Market: Development and Prospects," Economics Discussion / Working Papers 03-04, The University of Western Australia, Department of Economics.
    • Handle: RePEc:uwa:wpaper:03-04
    as

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    File URL: https://ecompapers.biz.uwa.edu.au/paper/PDF%20of%20Discussion%20Papers/2003/03_04_Fan_Wu_Groenewold.pdf
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    References listed on IDEAS

    as
    1. Groenwold, Nicolaas & Tang, Sam Hak Kan & Wu, Yanrui, 2004. "The dynamic interrelationships between the greater China share markets," China Economic Review, Elsevier, vol. 15(1), pages 45-62, January.
    2. Chen, G M & Lee, Bong-Soo & Rui, Oliver, 2001. "Foreign Ownership Restrictions and Market Segmentation in China's Stock Markets," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 24(1), pages 133-155, Spring.
    3. Lan Yisheng, 1997. "The Stock Market in China: Problems and Prospects for Domestic and Foreign Investment," Chinese Economies Research Centre (CERC) Working Papers 1997-07, University of Adelaide, Chinese Economies Research Centre.
    4. G. M. Chen & Bong‐Soo Lee & Oliver Rui, 2001. "Foreign Ownership Restrictions And Market Segmentation In China'S Stock Markets," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 24(1), pages 133-155, March.
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    Cited by:

    1. Li, Jia, 2012. "On the Empirics of China's Inter-regional Risk Sharing," MPRA Paper 37805, University Library of Munich, Germany.

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