This paper investigates the determinants of capital structure of financial service firms in China. Using a relative regression of accounting data for 36 A-share financial listed companies over the years [2005][2006][2007][2008][2009], an empirical study on determinants of capital structure in financial industry is conducted. The results show that profitability, firm size, non-debt tax shields, earnings volatility and non-circulating shares are significant influence factors in financial sector. Moreover, firm size is positively related to the corporate leverage ratio. It is also found that Chinese institutional characteristic affects the capital choice decision. While it confirmed that capital structure determinant of financial firms are similar to other industry, the largely state ownerships do affect capital structure choices.

Stock market has been associated with economic growth through its role as a source of new private capital. On the other hand, economic growth may be the catalyst for stock market growth. The purpose of this paper is to investigate the efficiency of the two official stock markets in China. The sample includes the daily closing prices of A-share and B-share indexes in both the Shanghai and Shenzhen stock exchanges for the period of January 1st, 2006 to December 31st, 2010. Three different approaches are employed; namely, serial correlation test, runs test and variance ratio test. Statistical evidence from serial correlation test shows that returns are correlated in both Shanghai and Shenzhen indexes and therefore the markets are weak-form efficiency. JEL Classification: G15

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China financial system design is reviewed. Past academic and non-academic publish material is perused to formed an understanding of the present financial system. Discussion and recommendation suggested strengthening the present reform of financial system.