An Analysis of the Validity of the Chinese A-share Market During the 14th Five-year Plan Period

Abstract

The Efficient Market Hypothesis (EMH), initially formulated and subsequently refined by the renowned American economist Eugene Fama in 1970, classifies markets into three tiers of efficiency: weak, semi-strong, and strong. As the world's second-largest economy, China has assumed an increasingly prominent role on the global stage due to its distinctive socialist framework and the ongoing development and enhancement of its capital market. The 14th Five-Year Plan, a pivotal component of China's social development agenda for 2021-2025, holds immense significance in propelling China's economic progress. In this study, utilizing a time series model, we conduct a comprehensive examination of China's A-share market throughout the current century, scrutinize the overarching context of the 14th Five-Year Plan, assess the efficacy of China's capital market, and propose potential remedies and future outlooks in alignment with the pertinent policies outlined by the Chinese government and the factors contributing to the inefficiencies observed within China's A-share market.