Abstract: Due to the special structure for equity ownership of Chinese listed companies,the price-earning ratio(PER)is distorted which consequently leads to an untrue reflection of the fluctuation of macroeconomics.This paper empirically analyzes the influence of non-circulating equity ownership,financial deepening structure and commodity price index on PER.The results show that in order to avoid a great impact on the stock market from the fact that the reduction of state-owned shares,the administration has to thoroughly adjust the financial deepening structure,improve the quality of listed companies and reform the related policy and system for the Chinese stock market.

Key words: price-earning ratio, circulating equity, financial deepening structure, commodity price index