Study On China's Growth Enterprise Market System Construction In Terms Of Risks

Growth Enterprise Market is a high-risk market which can provide many opportunities but also can bring to the country's capital market the potential instability. From the international experience, a lot of GEMs were set up overseas but apart from some markets like Nasdaq and AIM which are very successful, most of others got troubles in operation even some of them ended up closing. In order to create a stable GEM in China and then promote the development of amall and medium innovative enterprises, withdrawal mechanism of venture capital and the construction of multi-level capital market, focusing on building the market system from the view of the risks in GEM has profound and practical significance.Firstly from the perspective of general theory, the paper summarized the nature and characteristics of the Growth Enterprise Market and analyzed the Multi-function in terms of small and medium enterprise financing, venture capital and construction of multi-level capital market.Then the paper researched the market volatility risk and market liquidity risk in GEM and the impact factors of two types of risk and analyzed its positioning issues in China's capital market, including impact analysis on the Main Board and the relationship between GEM and SME board. Then the author selected two representative foreign GEMs as research targets, including the successful U.S. Nasdaq and relative unsuccessful Hong Kong GEM. Through the inspection of the development and status in two markets, the paper summed up the success of U.S. Nasdaq market in terms of system characteristics to prevent the market risks and the factors which resulted the failure of the Hong Kong GEM.Combined with the risk analysis, system characteristics of foreign GEMs and the existing system arrangements in our GEM, in terms of the construction of issuing and listing system, delisting system, trading system and supervision system, this paper proposed the overall direction and specific methods in system construction to prevent market risks and maintain the stability of China's capital market while our GEM realize its own functions.