Abstract:The article constructs a simple model to analyze the price-volume relationship of Chinese stock market. In the model, there are two kinds of investors, many uninformed traders and a manipulator. The inventory and expectation adjustments of the uninformed traders can both influence the price-volume relationship. And the uninformed traders will watch on the trades to infer the private information of the manipulator. To backup the model, empirical work is done thereafter with some significant and interesting results. The article also sheds some light on the analysis of liquidity of individual Chinese stocks. Investments on large stocks will encounter less transaction cost than those on small stocks