4. Appropriateness Study of Monetary Policy Regulation on Stock Price

Shanghai Stock Exchange and Shenzhen Stock Exchange are established in 1990 and 1991, respectively, which marks China’s stock transaction has moved toward highly organized system suitable for economic operation of developed market. As an important part of China’s socialist market economic system and financial system, capital market is under the joint influence of government institutional change and the gradual cultivation of itself. The State Council decides to set up the State Council Securities Committee (repealed in 1998) and China Securities Regulatory Commission (referred to as CSRC) in October 1992; besides, the Securities Law of the People’s Republic of China comes into force starting July 1, 1999. All these help China’s capital market enter into the standardized and legalized track.