On The Household Financial Portfolio Choice In China

The past decade has seen radical change in financial markets. Some of the most striking effects are the broadening of the stockholder base, and the growth in mutual fund and pension fund. On the other side, there has been dramatic change in household portfolio composition and choice. This research aims to explain two issues: First, to provide an in-depth theoretical analysis of household's participation in stock market through financial intermediaries; Second, to give empirical study in household financial portfolio choice in China and offer suggestions for our capital market reform.This research employs analytical methods, comparative and case study, and econometric tools. This research begins by the academic developments relating to household financial portfolio choice, and then offers a comparative analysis of household portfolios in developed countries in recent years. Under this background, we proceed to explain how the financial intermediaries affect household portfolio behavior and incorporate their function into the theoretical frame of household portfolio based on participation costs. At last, we use micro data for empirical study of financial portfolio composition of household in China and give suggestions.There are three main results in this research. First, develops the theoretical frame of household portfolio by incorporating financial intermediaries' function. Second, Empirical studies in China household portfolio have found that in addition to the standard economic and demographic factors, other factors such as financial intermediaries, house and psychological factors are significant. Finally, Based on the theoretical and empirical study, we suggest that the capital market reform should be led in the perspective of investor protection and education.