A Study Of China Securities Market Opening

China became a normal member of WTO on Dec. llth, 2002. Following rules and regulations of WTO, actively participating economic globalization and gradually opening Chinese security market become a inevitable developing trend of China. However, Chinese securities market is still in its infant state with strong dependence on industrial relationship and high financial risk. The opening of Chinese securities market will inevitably have a great impact on Chinese economy. How to develop the advantages and avoid the disadvantages become an urgent problem to Chinese government. This paper aims at discussing possible solutions of the above-mentioned problem. First, the paper introduces securities market opening processes and experience of some countries and regions in the world. Comparing economic environments of those areas with actual economic situation of China, we can conclude that China should indirectly open its securities market with advisable limitation and gradually take corresponding steps in different stages. Secondly, the paper compares Chinese securities market opening benefit with corresponding cost, and accordingly constructs a game theory model for analyzing opening degree of Chinese securities market. The analysis concludes that the optimal opening degree has a positive correlation with optimal inflowof external capital and service and internal securities sector competitiveness. In addition, the paper makes reference to international financial competitiveness indexes raised by IMD and puts forward six competitiveness indexes on Chinese securities market, including capital cost competitiveness, capital efficiency competitiveness, securities market system competitiveness, securities market activity competitiveness, public company quality competitiveness and securities dealer competitiveness. At last, the paper respectively gives solutions on securities investing opening, securities financing opening and securities marketing opening according to actual conditions, and concludes that China should open its securities market in different classes, different levels and different steps. Moreover, in the opening process of securities market, Chinese government should play an important role, timely control financial risk, and make full use of the rules of WTO to protect securities market whose competitiveness is still very weak.