Assignment

Capital market to take off amid susbtained Economic Growth

Date 09/11/2012

According to the research report recently completed by the Capital Market Institute of the Shanghai Stock Exchange, China has maintained a good momentum in economic growth. With a series of new positive policies to be released, the country will show great potential and bright prospects in its economic growth in the medium and long run. Accordingly, China's capital market is sure to make another qualitative leap by following the development trend of China's economy.

The report says that it is common that China faces the falling economy and inflation as well as a decline in corporate profits at the micro level during the period of economic transition. These phenomena reveal that China's economy is at the starting stage for the change in growth pattern.

The report points out that the deepening of urbanization, the transition of economic structure, and the upgrading of industrial structure will become three new driving forces to promote the sustained growth of Chinese economy. Apart from the three driving forces, beneficial policies in future reforms will play a critical role in economic growth. As the reforms move forward, the total factor productivity will grow further, which will mitigate the potential risk of the slowdown in economic growth in the future.

Based on the above statements, the report concludes that China's economy will make a leap forward, which will initiate a new era for the development of the Chinese capital market. In the new era, the shift in the economic growth pattern and the adjustment to the economic structure will depend mainly on the resource allocation in the capital market. In the past year, the China Securities Regulatory Commission (CSRC) carried out reforms and innovations in various aspects. To be specific, the CSRC adopted the measures including advocating value investing, deepening the reform in the new share issuance system, perfecting the...