Finance Seminar（2014-10）

Topic :Explaining the Underperformance of the Chinese Stock Market

Speaker:Jun Qian, SAIF and Boston College

Time:Thursday, 17 April, 10:00-11:30

Location:Room 217, Guanghua Building 2

Abstract：The size of the Chinese stock market, including stocks listed and traded in Shanghai, Shenzhen and Hong Kong exchanges, is the second largest in the world. The underperformance of this market, especially since the recent global financial crisis, relative to both developed (US) and large emerging economies (Brazil, Russia, India and South Africa) has been striking. This is despite the fact that the Chinese economy, also the second largest in the world, has been the fastest growing globally for the past three decades. With firm-level data from over 80 countries for the period 2000-2012, we examine the determinants of the underperformance of the overall Chinese market as well as stocks in each major industry. The poor performance is not due to undervaluation of Chinese companies; instead, factors such as the IPO and delisting processes, corporate governance related to self-dealing and information disclosure are main contributors.