Author(s)

Dahong Guan

Jinan University, Guangzhou, China.

By implementing X-11 process to eliminate the seasonal effect from the data of nominal GDP and Shanghai Securities Composite Index from 1996 to 2015, conducting co-integration test and Granger causality test on these processed data, and examining the leading characteristics of the securities index with the Lag regression model, the present thesis finally conducts a detailed analysis of the research results and puts forward some policy recommendations. The study suggests that there is a stable positive-correlating long-term relationship between Shanghai securities composite index and nominal GDP, the former being the Grainger causes for the latter, which mainly arises from the improvement in the institution of the stock market and the larger ratio of the stock market capitalization to that of nominal GDP. In addition, the increasing liquidity of long-term stock market and investors’ speculation to the stock market based on the national macro-control policies also elucidated the inherent property of Shanghai Composite Index as a leading indicator of Chinese Nominal GDP in the results presented.

Nominal GDP, Shanghai Securities Composite Index (SSCI), X-11 Process, Co-Integration Test, Primacy

Guan, D. (2018) Study on Relativity between China’s Nominal GDP and the Shanghai Securities Composite Index. Journal of Service Science and Management, 11, 527-542. doi: 10.4236/jssm.2018.115036.