The Impact of Stock Markets on China's Economic Development: Some Preliminary Assessments

Laurenceson, James (2002) The Impact of Stock Markets on China's Economic Development: Some Preliminary Assessments. Discussion Paper No 302, School of Economics, The University of Queensland.

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Author Laurenceson, James
Title The Impact of Stock Markets on China's Economic Development: Some Preliminary Assessments
School, Department or Centre School of Economics
Institution The University of Queensland
Report Number Discussion Paper No 302
Publication date 2002-01-01
Language eng
Subject 140202 Economic Development and Growth
K
Abstract/Summary The role that stock markets should be afforded in economic development policy in China is the subject of debate. Some argue that they are essential to reforming state-owned enterprises (SOE's) and overcoming deficiencies in China's credit markets. However, others claim they are not necessary institutions for achieving high levels of economic development and are more likely to be destabilizing. This paper seeks to shed light on the impact that stock markets have had on China's economic development to date. Available data suggests that listing SOE's has been important in terms of raising funds for their reform. However, the corporate governance impact has been ineffectual and stock markets were also an insignificant source of funding for non-state owned firms. Finally, on a macro-level, their impact on the overall level of savings mobilization and the allocative efficiency of capital has been negligible. The policy conclusions are that, firstly, the state should begin trading the shares that it controls, and secondly, non-state owned firms should also be allowed to list.
Keyword Economic development - China
Stock markets - China
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Additional Notes ISBN: 14465523

 
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