To stimulate the economy through the stock market does not work? ????In the global financial crisis and the devastating economic crisis, China's foreign exports were seriously affected, to stimulate domestic demand as the current macro-economic priority. Stimulate domestic demand in a variety of programs and ideas, there is a very attractive eye view: the way through government intervention to stock fry up, then, increase the income of investors, domestic demand will increase. And to stimulate domestic demand rose to Yijianshuangdiao. However, I believe, in the sub- prime mortgage crisis is what we need to reflect on the theoretical logic behind this reasoning is reasonable and scientific. In the special context of China, the stock rose not only does not stimulate domestic demand, but will exacerbate economic imbalances, Bu ÀûÓÚ Analysis on Constant Economic and healthy development. First, the "wealth effect" theory on the impact of China's financial decision-making "Raise the price to stimulate consumption," view behind the theory of an important judge, that the stock market's "wealth effect" in China has been very significant. The so-called "wealth effect" refers to the increase in stock market can stimulate consumption to increase, our community started to pay attention the wealth effect theory, began in 1999. Zai Asian financial crisis in the face of challenges, our government need to find new points of economic growth, revitalize Gushi in the move was seen as a living chess: Zhi Yao active stock market, people's hands Caifuzengjia can stimulate Ïû·Ñ, to economic Baituo currency tightening of the mire; and stock market financing for state-owned enterprises, help to bail out state- owned enterprises. In accordance with the present terms, is "to increase domestic demand to stimulate the market rally." Deeper analysis of why our government after the Asian financial crisis, Japan and the U.S. rely heavily on the stock market and financial models in the last crisis have a direct relationship between the different performance. Asian financial markets we see the Japanese model of financial development (bank-led) defects, while recognizing the advantages of direct financing, should be to realize the United States in 2001 after the New Economy bubble burst in further strengthening. Because the "new economy" bubble has burst, the stock market crash, when the United States and the real economy has not been seriously challenged. Therefore, Zai Asian financial crisis, China Di target model is actually determined the financial reform Le United States, Womenxiwang and the United States to establish a similar to Zhijie Rongziweizhu financial system, "Dali Fazhangupiao direct financing", "ultra Changgui Fazhanjigou investors "," Establishment of GEM "and other ideas are the product of this reform. Needs to be emphasized is that our party's 17 major report on "increasing the residential property-type income" is also parking to the U.S. goods directly from the U.S. "asset-based savings." Important to maintain high consumption means the United States is "asset-based savings", namely, by the residents and the real value of financial assets to make up for inadequate savings, asset-based saving into saving alternatives. Undoubtedly, if the increase in China through "asset-based savings" (the "property type income"), you can reduce the savings rate, increased consumption, the problem of insufficient domestic demand can be solved. But the 17 largest stock markets fell sharply after the fact tells us that "increasing residential property-type income" is not a simple matter to mess it became a "resident of property redistribution." In October 2007 of 6124 point to the end of 2008, stock market capitalization has shrunk by 5 trillion yuan, fell 70%, almost all investors hold the stock losses. As a financial "experts" have not been spared the same fund, the Fund over the past year more than 10,003 total loss of 100 billion yuan! The U.S. financial crisis has once again sounded the alarm, the residents of property-type income is unreliable, the savings is the case. In the sub-prime crisis, Premier Wen has a conclusion that to "deal between financial innovation and financial supervision, and between virtual economy and real economic relationship to deal with the relationship between accumulation and consumption" . These three words is the Chinese government on the U.S. financial crisis, a profound summary and reflection. If the Asian financial crisis 10 years ago, our country will not superstitious, "East Asian growth model", then the sub- prime crisis in the United States will allow us to new understanding of financial development models, so we re-understand the risks of the stock market and investment banking and regulatory issues . In November 2008 introduced the "Financial State 9", the pair set the tone for the stock market is "to maintain market stability", to expand the direct financing of the task had fallen to the "bond market", which is the decision-making major changes in attitude on the stock market , the stock market ahead of many attributes and modifiers quietly disappeared, this time to mention "the stock market can stimulate domestic demand rose," the case is somewhat "innocent" of. Second, the wealth effect is a beautiful lie International discussions on the wealth effect began in the nineties of last century. The last decade of the 20th century, the U.S. stock market rose steadily, at the same time, the U.S. economy and consumer spending rising level of long-term in the state, thus leading to the concern of many scholars, and in-depth analysis of this phenomenon. However, the views of different scholars. In discussing the relationship between stock market and economic growth, some scholars believe that there is positive correlation between the two. Such as Poterba (M. Poterba, 2000) that the stock price volatility and real economic activity has a strong positive correlation. Aylward and Glen (2000) through 23 countries during the period 1951-1993 a large number of data measurement results show that the stock market and macroeconomic positive relationship exists between this performance in different countries are broadly similar. Greenspan (Greenspan, 2001) from the official point of view the stock market wealth effect positive contribution to economic growth, saying, "produced by the stock market rose 'wealth effect', causing U.S. consumers spend more", promoted the 90s economic growth. Federal Reserve study shows that household wealth for each additional dollar will affect the post- permanent increase in consumption of 3-5 cents (Edward M. Gramlich, 2002), the additional spending, annual GDP growth by over 1 percentage point. Of course, some scholars have different views, Meyer (Colin Mayer, 1998) that the stock market is not important to the overall economy. Harris (Richard Harris, 1997) emphasizes the impact of the stock market on economic growth is not significant. Stiglitz (Stiglitz, 1997) is that the stock market not only fails to promote economic growth, and may hinder economic growth. In discussing the correlation between stock market and the consumer is concerned, the stock market and economic growth than the correlation between the existence of a larger dispute. Romer (Romer, 1990), Zandi (Zandi, 1999) that support the development of securities markets in consumer confidence, which also believes that there is no wealth effect on the impact of stock-owning households is also possible. Ludvigson and Steindel (1999) demonstrated the transmission mechanism of the consumer market, sure the stock market and consumption, there exists strong positive relationship. Poterba (M. Poterba, 2000) that even if the stock market wealth has a lower marginal propensity to consume, the wealth effect is also very obvious. Zandi (Zandi, 1999) based on 1929 and 1987, the U.S. stock market ups and downs of consumer spending on research shows that as the wealth effect, the U.S. stock market ups and downs for every one U.S. dollar a direct impact on consumer spending 4-7 cents. On the one hand, stock prices rose for every one U.S. dollar could boost consumption rose 4 cents, this expenditure will enable the United States GDP increased by 1 percentage point; the other hand, down one U.S. dollar per share, 7 cents could reduce consumer spending, fell on consumption more negative affect performance significantly. On the relationship between stock market and consumer opinions of scholars hold the opposite view that uncertainty and volatility in the consumption of "delay" so that the wealth effect is not significant. Such as the 1987 stock market crash, not a sharp decline in U.S. consumption, Stiglitz (1997) through the 1987 stock market crash of an empirical study, that people react to changes of wealth is very slow, the stock market on consumption is very limited. But he also acknowledged that long-term sustained decline in the stock market or may be a tremendous blow to the consumer. Niemira (1997) on the U.S. stock market wealth effect negative attitude, they investigated the situation in the U.S. stock market, measure the size of wealth effect, concluded that the role of the stock market does not exist on the consumer. Comprehensive terms, the United States, scholars of the results, even if the obvious is that the wealth effect, but also that the stock market down the marginal impact on the economy than the stock market up to the marginal impact on the economy. Then, only the stock market in Manniu state (rising), the only significant wealth effect, or the long term, the wealth effect is negligible, because the stock market volatility is normal, can not rise forever. Look at China's stock market wealth effect of the theoretical study? China's academic circles since the late nineties of last century had a lot of related research. Yu-Ming Feng (1999) investigated the stock market through the ups and downs in the rate of total retail sales of social commodities with the whole existence of the growth rate of "Granger causality analysis" to examine the existence of stock market wealth effect in China. Liang Yufeng, Yu-Ming Feng (2000) used a sample investors on the Shanghai stock analysis of survey data, that a rising stock investors in the stock index will have the illusion of wealth and income is expected to expand consumption, so there are some China's stock market wealth effect , but the pattern of income distribution caused by an irrational market, stock market, "Matthew", seriously dampening the wealth effect into full play. Zhen-Ming Li (2001) The use of Ando and Modigliani used the extended life cycle model validation that our data, China's stock market capitalization as a small number of residents involved in the stock market is limited and our residents from the main stock market gains for the stock re-investment or speculation rarely used for mass consumption, so the stock market wealth effect on consumption only have a small impact. Zhong Liu (2001) and Lin Lin (2002) that the Chinese stock market wealth funds account for the proportion of the total population low, so the wealth effect on consumption is not significant. Yuming Gui, Xia Xinping and Wang Yixia et al (2003) study shows that China's stock market still has a wealth effect, the main factors affecting the consumer is still disposable income and consumption habits. However, China's investment in the stock market has certain effects, but this impact is relatively small. Xue-Feng Li, Xu Hui (2003) study showed that the Chinese stock market wealth effect is almost non-existent. Overall, China's stock market wealth effect is extremely weak. In other words, I hope to start the stock market to stimulate consumption, China's current stock market can not undertake this important task. Recently, the author of a student in China since the 2005 stock market wealth effect measurement study, the conclusion is also a wealth effect is not significant. Third, the stock rose exacerbate economic imbalances From the local perspective, since the end of 2005 rose to solve the many problems in our economy, most notably the number of direct financing through the stock market increased rapidly, the stock market in 2007, the financing will be more than 700 billion yuan (including the number of more than 400 billion yuan IPO ), hundreds of listed companies by the capital markets funding. It is particularly worth mentioning is that the state-owned commercial banks through capital markets to rapidly increase capital adequacy ratio, so that state-owned commercial banks greatly increased ability to resist risks. With various aspects related to capital markets, the sector's profitability are greatly improved, the state received in the capital market is also very generous tax. But the overall perspective, the stock price up and the stock market boom exacerbated the country's macroeconomic imbalances, the economy is not conducive to sustained and healthy development. Many studies show that a major imbalance in China's current economic performance is the excessive growth of net exports, the net export growth is mainly due to excessive consumption inadequate. Further study the surface, due to lack of consumer savings, major changes in structure, the proportion of corporate and government savings increase the proportion of household savings decline. So, what is beneficial to increase the activities of government and corporate savings will exacerbate the imbalance of our economy. Stock market boom of the biggest beneficiaries are companies, followed by the government, the interests of the residents suffer. First of enterprises, enterprise since 2007 price of ordinary shares issued in more than 30 times price-earnings ratio (IPO priced at 30 times earnings, issuance of more than 30 times price earnings ratio generally), which is the world's lowest-cost capital market financing. Enterprises through capital markets at low cost financing is bound to increase corporate savings. For capital markets, capital mainly flows between residents and enterprises and distribution, increase in household savings, corporate savings reduction. Simple calculation, investors of listed companies in 2007 contributed about 800 billion yuan of funds (mainly issuing additional shares), to pay the taxes and fees totaled 400 billion yuan (mainly stamp duty and commission), for a total 1.1 trillion element. The total profits of listed companies in 2007 is difficult to estimate more than 1 trillion yuan, secondary market investors, listed companies corresponding to about 3,000 billion yuan in profit, less transaction costs paid by investors. Investors Dividend income from listed companies is estimated at 1000 billion yuan, equivalent to transaction costs investors pay a quarter. Investors in general, a net loss. 2007 Shanghai Composite Index rose 97%, rising in price can be temporarily covered up losses to investors the truth. But the investor is a virtual book total assets, is volatile and can not be used to accurately reflect the investor's earnings. When stock prices fell sharply after 2008, 2007, show that the huge losses into profit quickly. In this process, the Government can not only increase revenue through the imposition of stamp duty and profits by listed companies (because of financial costs decrease) increase in the tax increase is always the beneficiary, therefore, is the increase in government saving. In short, the stock price rose, the stock market boom, the Government savings and corporate savings has risen, while the household savings ratio will decline, contributing to imbalances in the Chinese economy. Fourth, the policy prop is the key price distortions The above findings and our original intention of developing the capital market is difficult to fit in. The original purpose of the development of capital markets is the development of direct financing, optimizing the structure of financial markets and improve the efficiency of resource allocation, increase the property-type income for the people to create conditions, but the current capital market has become the macroeconomic imbalances of the accelerator, why not? Basic reason is overvalued. Because of over-priced, low-cost financing to businesses, investors, of course, corresponds to very low levels of investment income, representing the residents to spend money on subsidies to businesses and governments. Therefore, the face of our capital markets has made encouraging achievements, achieved a historic leap equity financing, but overall situation into consideration, China's economy has thus imbalances. But this does not mean that I oppose the development of capital markets. The current capital market was the result of this embarrassing outcome, because the key structure of a sound capital market, corporate bond market is not developed, but most of the time the stock market speculation in the atmosphere too strong, serious overestimation of stock. Is the number of our stock is overvalued, compare the current price of A shares and H shares of the price difference can be clear, H share price average A share price of around 60%. Hong Kong market is the global open market, there is no investment products to be underestimated, especially long been underestimated. This shows that A shares of the degree of overestimation. It is worth mentioning that in 2005, China's A share price briefly dropped to around 10 times price-earnings ratio, price, and then H-shares the basic integration, the market's investment return rate of around 7%, which is a relatively reasonable in the state. Unfortunately, such a reasonable price soon disappeared. Due to historical reasons, when the market price down to reasonable levels, investors losses, securities firms crises, various pressures, the Government adopted a "policy of active stock market" so that a reasonable price once again distorted. The current stock market has been very embarrassing. Since the end of 2007, the share price fell by an average 60% more, investors have been countless losses, but the stock still has not fallen on the long-term investors an attractive range (5% dividend return on the investment return of more than 10%). If the stock price downward revision means that the path into the long bear market, stock market finance function would be greatly reduced, investors faced losses and securities institutions in turn is facing bankruptcy. However, if the policy to the stock prices at artificially high, meaning that investors continue to enterprises and government subsidies to further increase China's economic imbalances, stimulating domestic demand can not be achieved. Why China's stock market bubble in the state for long, the root cause is the "policy market" caused, when the stock market fell, the government introduced policies to stimulate the stock market has always, since 1991, the Government has a comprehensive intervention at least seven times the stock market, stock market has led to a cycle of seven major ups and downs. The policy again and again to shore up the market price is difficult to self-correct, the stock market bubble inflated gradually. Only when the stock market investors get from the stock market listed companies to pay dividends than their transaction costs, investors may have to share the benefits of economic growth, stock markets may be to increase the property-type income residents of a channel, or the stock market can only redistribution of national wealth is the place. To achieve this goal, we must allow stock prices to a reasonable range, the policy prop is a big mistake.
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