Very high initial returns can be found in China's A share stock market. In this paper, we empirically identify some of the causes of such high initial returns, using data compiled for 472 A share Initial Public Offerings (IPOs) listed between January 1, 1995 and May 30, 1998. We attribute the high initial returns to the disconnection of the pricing mechanisms between A share stock's primary market and its secondary market. We also find some of the factors that have significant influence on the initial returns such as the offerring price—the time of the IPO ，the size of the IPO and so forth．Our empirical results do n0f support thai the IPO underpricing is due to a separating equilibrium or the government commitment，which has been sug ested by some western scholars Neither do we find any significant long term under Drformance within the IPOs we have sludied．In addition．there is a vast oversubscription in almost every IPO，which makes the actual return to the subscribers who have been actual[y allocated some shares of the new issue far less than the nominal initial return．AIl these phenomena described above are associated with hoth the stock market's stage of development and the government’s regularing policies