China's stock market deeply influenced by the Chinese government!From late 2005 to October 2007, the Shanghai stoke Index has surged from 1,000 points to 6,000 points. You can make money just to buy the stock. The stock market rise was due to a series of government reforms in the stock market. At the beginning of China's stoke market ,a listed company’s shares were divided into two parts :The majority of the stock was a legal person shares, and this part of the stock was not allowed trading in the stock market; only another small part of the stoke could be traded freely in the stoke market. The result was that because they would not consider the price of the current shares, major shareholders often make the decision to harm the interests of shareholders in circulation. Then our government decided to reform the stock market in 2006.All stocks must be in circulation, but the major shareholders have to pay some benefits to small shareholders to make their restricted shares can be traded freely. So, as long as you had a piece of stoke in 2006,you could get paid by the major shareholders in the form of cash or stoke. The consequence was of course the stoke market rally! Then, the stoke market was influenced by the government policies again.In order to curb inflation, the government has adjusted the deposit rate and the deposit reserve ratio six times in 2007.As the result ,a booming stoke market collapsed. Investors must pay taxes to our government when they trade stokes. However, our government will not care whether the listed company will give the annual’s dividends. Every year, all of listed companies dividends are not enough to pay taxes to our government. In summary, because China's current political and economic system, China's stock market is bound to become a bully!
