Short selling has been allowed in the China stock market since March 2010 and only stocks that are added into the list can be sold short while others cannot (similar to the practice in the Hong Kong stock market). Through the analysis of the movements of prices around the additions for individual stocks to the list, this study finds that 1) short-sale constraints lead to overvaluation of stock prices, which is consistent with Miller’s (1977) intuition; 2) the overvaluation phenomenon of short-sale restriction has a negative relationship with the extent of dispersion of investor opinions, which is consistent with Cragg and Malkiel (1982) but contrary with Miller (1977); 3) short-sale constraints increase both volatility and skewness in daily returns of individual stocks, which consists with Scheinkman and Xiong (2003) and Bris et al. (2007). As a whole, this study offers more insights to the literature as to the effects of the short-sale constraints and their role in stabilizing the China stock market