Analysis on the Cause of Un-matched Growth of China's M_2 and GDP

Since the economic reforms and open-door policies began in the late 1970's, China's economy has improved its monetization level greatly. But China's M2 grows faster than nominal GDP (summary of real GDP and inflation rate), which caused the unmatched growth of M2 and GDP. This paper tries to explain this phenomenon and believes that the causes lie in the flexibility of money demand, the monetization of stock assets, the inadequacy of finance innovation and the underground economy and gray finance.