Abstract: Using Event study methodology and transactions data for A-Share stocks from 2009-2011 in Chinese stock market, this paper try to provide an explanation for the increasing trend of corporate social responsibility (CSR) reporting by investigating the role of corporate social responsibility (CSR) disclosure in reducing information asymmetry between managers and investors, as proxied by stock price volatility and liquidity. We make the day which firms disclose CSR reports as our event day. Studies have shown that after CSR disclosure, there is an obvious increase of stock liquidity and an decrease of stock volatility, however, liquidity increases first and then decreases, volatility decreases first and then increase. The findings suggest that the information content of corporate social information indeed can improve the market quality largely in China.