Some Thoughts on Chinese Stock Market – Based on its disconnection with real economy in contrast to real estate market

Abstract

The discussion starts from the fact of the extremely low correlation between the performance of Chinese stock market and the real economy. The author aims to exhibit a relatively comprehensive view of Chinese stock market (as well as the related economic factors) and analyzed the causing factors for the low correlation from different angels. Besides the tests which signify the low correlation of stock market to real economy (with real estate being the contrasting group), mainly qualitative methods are adopted in analyzing and explaining the results of low correlation from different perspectives. The conclusion is that stock market is not the optimal option for driving Chinese capital market, and policy suggestions are also given in this paper.