Abstract
This paper examines how the Chinese stock market has evolved from the late 1980s to the end of 2018. We show that the current market design, trading mechanism, and regulatory framework are shaped not only by China's economic development and external events but also by frequent government interventions. The segmentation of the stock market is unique in the way that various sub-markets differentiate among target investors and types of listed firms. Since the degree of segmentation has varied over time, caution must be exercised when analyzing equity data that span multiple years and different trading venues. In the meanwhile, certain characteristics that were regarded as peculiarly ``of Chinese characteristics,'' such as the state-owned funds designed to cushion large market declines, also have their counterparts in developed markets. Since comprehensive accounts of these issues are limited, we summarize the existing empirical studies and mention some caveats. We also describe the available data-sets and suggest some topics for future research.
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