CHINA needs to promote the healthy development of its stock market at a time when the country's economy is facing unprecedented challenges.

On the one hand, China's export-oriented economic growth mode is greatly challenged by the diminishing demand from the export market as well as the inflation of imported raw materials nowadays.

If China continues to target mainly the international market and make large investments accordingly, once it loses its price advantage due to increasing costs, the overinvestment in the market will lead to excessive inventory and a sharp decrease in profits.

Meanwhile, the prosperity of the global economy is hampered by the global economic imbalance, the subprime mortgage crisis of the United States, global excessive liquidity as well as the soaring prices of industrial raw materials.

All these factors affect the performance of Chinese listed companies depending heavily on exports, thus resulting in great fluctuation in the country's stock market.

On the other hand, the Chinese economy itself is encountering problems including excessive liquidity, the pressure of inflation, huge inflows of hot money, and an increasing demand for capital supply for the reconstruction of earthquake-devastated areas in Sichuan Province.

Further, the Chinese stock market is still undergoing reform, and many structural and systemic problems need to be resolved. All these factors exert pressure on a vulnerable stock market.

In fact, a healthy stock market should not only exercise its powerful financing capability, but should also focus more on value discovery and fortune creation. If China's stock market fails to ensure the vast number of investors their right in profit sharing, then its financing capability will also be largely weakened.