Why China's stock market valuation of the phenomenon of the presence of high

 Why China's stock market valuation of the phenomenon of the presence of high (one)
the price of the stock market has been higher than the international average level in mature markets, in other words, in accordance with the standards of the international capital market, China's stock market has been a bubble. How to explain this phenomenon? stock market bubble will persist it? explanation of these issues can not only build on the market with a reference value, the same investment decisions makes sense.
one, resulting in the general rules of the stock market bubble
general, Investors in the optimism of infection remain only under the stock continued to rise, resulting in high valuations (or the stock market bubble) phenomenon. From the history of the United States, when the new technology revolution,UGG boots, the process of economic recovery in the economy, investors are prone to over-optimistic market expectations, thus generating the stock market bubble. In the past 100 years, the average monthly market price-earnings ratio (net of inflation) is 15.08 times the total peak appeared four times price-earnings ratio,bailey UGG boots, respectively, 25 times the 1901 , 1929, 30 times, 23 times in 1966, 45 times in 2000. It appears four times price-earnings ratio and the peak of the last century the technological advances of four large identical.
in the United States in the past 100 years , there has been four such cycles: the new technological revolution has led to optimistic expectations of future economic stock market rose r r interpretation model of the financial crisis (such as the Minsky model) is entirely consistent.
II, live stock market does not conform to the classical model In 1995, China there have been two major bull market, the first from 1996 to 2001, the biggest gain in average price is about 300% (excluding the price of new shares influence the rate of increase of about 200%); the second time the bull market in late 2005 to the end of 2007, the Shanghai Composite index the largest increase of 510% (excluding impact of new shares issued on the index, the largest rate of increase of about 400% or so). But Study the past 10 years China's economic changes,UGG boots cheap, not only does not appear similar to the U.S. history of the major technological change, and economic growth in the first bull market (1995 m2001 years) also remained low.
my opinion, to find out our mechanism of the stock market bubble, the stock market must participate in the main body to find a cause. in the main body of China's stock market, there are three: government, institutional investors and retail investors. This is the behavior of interaction between the three formed a bubble in China's capital market ,UGG bailey button, we might call a variety of targets (in 1998 or the main goal is to reform of state enterprises service). It is precisely because the government's guiding ideology of pragmatism took a quick profit before the stock market is not the way to go.
history from the perspective of dialectical analysis, China's stock market started by the government to force, is typical of exogenous growth model, therefore, government intervention is inevitable. but the Government too much about their short-term goals, it will deviate from the allocation of resources to the stock market fundamental objective. For example, in 1999, for the realization of (The same is at this point or so (1260 points), December 1996, the Government has also used the People's Daily In order to achieve market goals for the SOE reform services, a variety of disguises to be conniving and stock market manipulation, because many state-owned enterprises can not meet listing standards, and similarly, if the market is not manipulated, listed state-owned enterprises can not sell a good price. the majority of investors The Battle of the process with the government gradually realized the government's policy intentions and the law. they good or bad depending on the policy benchmark for the market, when the stock market downturn, the Government will introduce favorable policies, while easing the regulation of the market, so the investment market who will take the hint, and re-entered the market, the stock market re-active In 1994 to 2002, the government issued six favorable policy interventions stock prices, the formation of the six the corresponding policy in the industry known as the