According to Michael Hasenstab, China has entered a completely new stage in
building securities markets. He pointed out that policy innovations have very
useful promotion for it.
The author states that a well functioning government bond market are crucial
for central bank's execution of monetary policy and can provide the capital
market with much of information mentioned many aspects. And besides, he explain
opposition of efficient or function markets which would be likely to seriously
restrict China's growth in economy. He also argue that the influence would be
brought by inefficient domestic capital market. Consequently, he refers to
assess debt and equity market behaviour even taking a table to illuminate this
issue. In this section, the author specifically mentions Chinese stockmarket
behaviour under the circumstances of equity market. He simultaneously asserts
China was to open its capital market when its market should remain efficient,
that could be appear efficiencies in the allocation of capital.
In the latter part of the article, the author specialize eight aspects of
possible policy to explain that they would be policy innovations to develop
these markets efficiently.
It is of great issue that the author notes ignores some details. In my opinion,
the study on efficiency of financial market can be analysed in terms of two,
first, the financial market's own operation ability , Second, the financial
market transports the function ability to oppose economic development. The
operation of the financial market is its foundation to economic function
efficiency. It can be analysed from four aspects as follows: in the first
place, reflection sensitive degree to all kinds of information of financial
commodity price on the market; in the second place, the price of all kinds of
goods has inherent mechanism of stabilizing the equilibrium on the financial
market; furthermore, the quantity of financial...