The purpose of this dissertation is to examine whether the relationship between earnings, book value and equity value of a firm still holds in this different economic environment. What is found is that the associations do hold in Chinese market but the degree of the relationship is different. Overall, in China, earnings indeed have information content and are relevant to forecast equity value of a firm after the control of book value.The importance of earnings, however, seems to be not that high as a predictor of equity value. Book value has a stronger relation to equity value in this environment. The fact that in the immature market of China it is too difficult to determine market value by forecasting future expected earnings may explain this difference. In a unstable and immature economic environment in which book value of earnings is quite uncertain, investors may be paying attention to other factors rather than earnings. At the same time, Chinese investors may have found this criterion and applied it well.