The growth of a country?s stock market is a reflection of its economic development. Since China began its economic reform in the late 1970s, it keep a high speed economic growth. However, from 1991 to 2006, the composite index of Shanghai Stock Exchange lost half of its value while it enjoyed lower interest rates year after year. This article attempts discuss this observations by virtue of amounts of data. The reason that the deviation between the evolution of Chinese stock market and its economic development depends on the stock market structure, macro-control policies, rent-seeking, strong government intervention, and inconsistent market information.
