ABSTRACT
This chapter explains the causes of the puzzles and proposes solutions by investigating the special social and economic environment in which China's capital market has developed. It analyzes the interaction between corporate governance and market volatility, as well as assessing the impact of corporate governance on the volatility of China's securities market. Many factors contribute to the fluctuation of a securities market: international competition, financial policies and laws, administrative governance, and corporate governance of the listed companies all influence the movements of the securities market. Some Chinese companies are allowed to issue shares on both domestic securities markets and overseas securities markets. The share prices of Chinese companies on the domestic securities market are many times higher than their prices on overseas securities markets. As a result, Chinese securities markets are regulated by an uncoordinated jigsaw puzzle of more than two hundred laws, regulations, and Supreme Court decrees.
