To research the operating mechanisms of rural financial reform, through setting up a contract model, the constraint roles of reputation and legal intervention on the default risk arising in the operating of the credit...To research the operating mechanisms of rural financial reform, through setting up a contract model, the constraint roles of reputation and legal intervention on the default risk arising in the operating of the credit union funds are inspected. Analysis indicates that the increase in reputation cost can reduce the probability of union member default behavior and the probability of turning to the law for the credit union funds. Meanwhile, the amount of loans and the interest rates can increase the probability of turning to the law for the credit union funds. Below the marginal values, the penalty mechanisms can reduce the balancing probabilities of member default behavior and turning to the law for the credit union funds, namely, the penalty has some "substitution effect" for turning to the law for the credit union funds.展开更多
The global financial supervision system reform has achieved remarkable success and China has played an important part in this reform.The outbreak of the global financial crisis in 2008 has showed the urgency and neces...The global financial supervision system reform has achieved remarkable success and China has played an important part in this reform.The outbreak of the global financial crisis in 2008 has showed the urgency and necessity of the enhancement of international financial regulation.For the past eight years,G20 economies展开更多
I. IntroductionAs Douglas North once said, "Institutions are the rules of the game in a society. The beginning of wisdom is to understand how the game is played." In the same way, it is vital to understand t...I. IntroductionAs Douglas North once said, "Institutions are the rules of the game in a society. The beginning of wisdom is to understand how the game is played." In the same way, it is vital to understand the international experience and rules of a financial system when a country tries to advance financial reform. International experience shows that the development展开更多
Xu Xiaonian is a professor of economics and finance at the China Europe International Business School. He has been a managing director and head of research for China International Capital Corp. Ltd. and senior economi...Xu Xiaonian is a professor of economics and finance at the China Europe International Business School. He has been a managing director and head of research for China International Capital Corp. Ltd. and senior economist with Merrill Lynch Asia Pacific in Hong Kong. He has also worked as a consultant for the World Bank. Xu obtained a Ph.D. in economics from the University of California at Davis and has taught at Amherst College in Massachusetts. At a recent forum sponsored by the China Europe Internationa...展开更多
Since 1979 China has adopted a series of measures to reform its financial system. These measures involved establishing the macro control system of the central bank. setting up policy banks, perfecting the financial or...Since 1979 China has adopted a series of measures to reform its financial system. These measures involved establishing the macro control system of the central bank. setting up policy banks, perfecting the financial organization system, developing commercial banks and the monetary market, and reforming the foreign currency management system. The reforms of the past 15 years have brought great changes to China’s financial system. The old unified banking system was broken and diversified financing institutes emerged. Now a financial system comprising the central bank, specialized banks, commercial banks, insurance companics, trust展开更多
Financial repression does not suit the needs of economic and financial development in the long run, and interest rate liberalization is a natural choice for the development of China＇s financial markets＇. Based on a ...Financial repression does not suit the needs of economic and financial development in the long run, and interest rate liberalization is a natural choice for the development of China＇s financial markets＇. Based on a comparative analysis of interest rate liberalization processes between some developed countries and China and value assignment to key milestones in interest rate markets, the authors have measured the level of China＇s interest rate liberalization to be 80.64%, i.e., a complete liberalization has been initially achieved in China with the notable exception of the deposit interest rate market. Deposit interest rate liberalization is poised to be the last step in China＇s interest rate liberalization process.展开更多
The emergence of Yu＇E Bao and the like provides Chinese investors with a new and flexible investment option. Such new investment instrument forces up the cost of capital of local banks and also takes away the market ...The emergence of Yu＇E Bao and the like provides Chinese investors with a new and flexible investment option. Such new investment instrument forces up the cost of capital of local banks and also takes away the market share from them. Yu＇E Bao has allocated most investments in inter-bank money market due to the liquidity concerns. This study investigates Yu＇E Bao＇s portfolio allocation and potential risk, and also provides policy implications for regulators. The research findings suggest that regulators should issue more provisions to further regulate the operation of online investment products and keep the liquidity risk under control, i.e. require money market funds to hold more capital in reserve on a gradual basis. By examining the case of Yu＇E Bao, a new online investment product in China, this study sheds light on the recent financial development and reform of China.展开更多
In order to address the plight of rural financing, the 2007 China Banking Regulatory Commission, China＇s State Council started rural banks in provinces, towns and villages. There are so many problems faced by rural b...In order to address the plight of rural financing, the 2007 China Banking Regulatory Commission, China＇s State Council started rural banks in provinces, towns and villages. There are so many problems faced by rural banks. The most pressing issue is the sustainability of targeting deviate due to restraints, shortage of funds, and loan risks. In order to effectively address these issues, this paper presents some solutions展开更多
Along with the changes in China's development stage and internal and external conditions,sci-techinnovation has become the core driving force for China's high-quality economic development in the new era.From t...Along with the changes in China's development stage and internal and external conditions,sci-techinnovation has become the core driving force for China's high-quality economic development in the new era.From the perspective of financedriven technological progress,this paper constructs an endogenous growth DSGE model to analyze the relationship between financial resource allocation,technological progress,and economic growth.This study proves the counter-cyclicality of technological innovation in China,and finds that the allocation of financial resources between enterprises'productive investment and innovation investment can affect economic growth by changing the scale of factor inputs and technological progress rate,and that there is a see-saw relationship between these two effects,with thelatter dominant.On that basis,this paper explains the dynamic transmission mechanism among finance,technology and economy.During theeeconomic expansion period,enterprises expand their production scale,financial resources providemoreesupport to productive investment,with less support to innovation investment,thus the technological progress rate goes down;and during the economic contraction period,enterprises reduce their production scale,ffinancial resources cut support to productive investmentand turn to innovation investment,SO technologicalpl rogress rategoes up.The implications of this study on policy are as follows:when faced with new contradictions and challenges in the current development stage,China should get a grip on the new development pattern,seize new opportunities,further deepen financial reforms,optimize the financial resource allocation mechanism,encourage innovation investment,and give full play to the role ofequity markets in supporting corporate R&D and innovation.Meanwhile,coupling with prudent and moderate macro-control policies,China should provide a positive macroenvironment for corporate innovation,stimulate corporate on innovation demand,promote technological progress,andboost high-quality economic development.展开更多
China finds itself in a dual transitional period forboth its economy and its society with the govern-ment playing key role. The government is obliged tomaintain and reinforce its capacity to mobilize and allo-cate soc...China finds itself in a dual transitional period forboth its economy and its society with the govern-ment playing key role. The government is obliged tomaintain and reinforce its capacity to mobilize and allo-cate social resources, to maintain a stable developmentof both the economy and society.the paper,concernedwith the source of funds, has divided national capacityinto national fiscal capacity and national financialcapacity.By calculation and analysis of the fiscal ca-pacity and financial capacity,we will explain the role ofthe finance industry as "secondary public finance."展开更多
The global financial crisis in 2008 thoroughly exposed the shortcomings of the existing international financial system, followed by rising initiatives on the international financial governance system reform. Unlike pr...The global financial crisis in 2008 thoroughly exposed the shortcomings of the existing international financial system, followed by rising initiatives on the international financial governance system reform. Unlike previous reforms, emerging economies as a group have gradually become an important participant in the current round of international financial reform, especially with the BRICS countries as the main representative. This paper argues that the BRICS mechanism is in a trial period, and whether it is capable to form a cohesive institutional actor to participate in international financial governance, and to completely change the long-term situation of international financial affairs dominated by developed countries under the framework of the G-20 depends on whether BRICS member states can continue to maintain a rapid economic development, to create a strong convergence of interests and to maintain a relatively closed nature of the mechanism.展开更多
Over the past 40 years since the launch of reform and openingup,China’s finance has undergone substantial and fundamental changes in terms of size,structure and pattern as well as function,competitiveness,and intern...Over the past 40 years since the launch of reform and openingup,China’s finance has undergone substantial and fundamental changes in terms of size,structure and pattern as well as function,competitiveness,and international influence.Therefore,an accurate and comprehensive understanding of the current situation of China’s finance and its history in the last four decades is a prerequisite for deepening the reform and opening-up of finance and a foundation for establishing a modern financial system in China.This paper reviews the historical evolution of China’s finance over the past 40 years,focussing on the volume and market share of different types of financial assets,financing tools and mechanisms,patterns in and functions of finance,the risk structure in the financial system,financial opening,and the financial regulation model.It further proposes that in the future,China should establish a modern financial system characterised by‘large-economy finance’.展开更多
This paper reviews the issues involved in moving towards greater exchange rate flexibilityand capital account liberalization in China. A more flexible exchange rate regime wouldallow China to operate a more independen...This paper reviews the issues involved in moving towards greater exchange rate flexibilityand capital account liberalization in China. A more flexible exchange rate regime wouldallow China to operate a more independent monetary policy, providing a useful bufferagainst domestic and external shocks. At the same time, weaknesses in China’s financialsystem suggest that capital account liberalization poses significant risks and should be alower priority in the short term. This paper concludes that greater exchange rate flexibilityis in China’s own interest and that, along with a more stable and robust financial system, itshould be regarded as a prerequisite for undertaking a substantial liberalization of thecapital account.展开更多
基金The Philosophy and Social Sciences Program of Guangdong during the 11th Five-Year Plan Period for 2007(No.07D02)the Major Tender of Guangdong for 2007(No.KT005)
文摘To research the operating mechanisms of rural financial reform, through setting up a contract model, the constraint roles of reputation and legal intervention on the default risk arising in the operating of the credit union funds are inspected. Analysis indicates that the increase in reputation cost can reduce the probability of union member default behavior and the probability of turning to the law for the credit union funds. Meanwhile, the amount of loans and the interest rates can increase the probability of turning to the law for the credit union funds. Below the marginal values, the penalty mechanisms can reduce the balancing probabilities of member default behavior and turning to the law for the credit union funds, namely, the penalty has some "substitution effect" for turning to the law for the credit union funds.
文摘The global financial supervision system reform has achieved remarkable success and China has played an important part in this reform.The outbreak of the global financial crisis in 2008 has showed the urgency and necessity of the enhancement of international financial regulation.For the past eight years,G20 economies
文摘I. IntroductionAs Douglas North once said, "Institutions are the rules of the game in a society. The beginning of wisdom is to understand how the game is played." In the same way, it is vital to understand the international experience and rules of a financial system when a country tries to advance financial reform. International experience shows that the development
文摘Xu Xiaonian is a professor of economics and finance at the China Europe International Business School. He has been a managing director and head of research for China International Capital Corp. Ltd. and senior economist with Merrill Lynch Asia Pacific in Hong Kong. He has also worked as a consultant for the World Bank. Xu obtained a Ph.D. in economics from the University of California at Davis and has taught at Amherst College in Massachusetts. At a recent forum sponsored by the China Europe Internationa...
文摘Since 1979 China has adopted a series of measures to reform its financial system. These measures involved establishing the macro control system of the central bank. setting up policy banks, perfecting the financial organization system, developing commercial banks and the monetary market, and reforming the foreign currency management system. The reforms of the past 15 years have brought great changes to China’s financial system. The old unified banking system was broken and diversified financing institutes emerged. Now a financial system comprising the central bank, specialized banks, commercial banks, insurance companics, trust
文摘Financial repression does not suit the needs of economic and financial development in the long run, and interest rate liberalization is a natural choice for the development of China＇s financial markets＇. Based on a comparative analysis of interest rate liberalization processes between some developed countries and China and value assignment to key milestones in interest rate markets, the authors have measured the level of China＇s interest rate liberalization to be 80.64%, i.e., a complete liberalization has been initially achieved in China with the notable exception of the deposit interest rate market. Deposit interest rate liberalization is poised to be the last step in China＇s interest rate liberalization process.
文摘The emergence of Yu＇E Bao and the like provides Chinese investors with a new and flexible investment option. Such new investment instrument forces up the cost of capital of local banks and also takes away the market share from them. Yu＇E Bao has allocated most investments in inter-bank money market due to the liquidity concerns. This study investigates Yu＇E Bao＇s portfolio allocation and potential risk, and also provides policy implications for regulators. The research findings suggest that regulators should issue more provisions to further regulate the operation of online investment products and keep the liquidity risk under control, i.e. require money market funds to hold more capital in reserve on a gradual basis. By examining the case of Yu＇E Bao, a new online investment product in China, this study sheds light on the recent financial development and reform of China.
文摘In order to address the plight of rural financing, the 2007 China Banking Regulatory Commission, China＇s State Council started rural banks in provinces, towns and villages. There are so many problems faced by rural banks. The most pressing issue is the sustainability of targeting deviate due to restraints, shortage of funds, and loan risks. In order to effectively address these issues, this paper presents some solutions
文摘Along with the changes in China's development stage and internal and external conditions,sci-techinnovation has become the core driving force for China's high-quality economic development in the new era.From the perspective of financedriven technological progress,this paper constructs an endogenous growth DSGE model to analyze the relationship between financial resource allocation,technological progress,and economic growth.This study proves the counter-cyclicality of technological innovation in China,and finds that the allocation of financial resources between enterprises'productive investment and innovation investment can affect economic growth by changing the scale of factor inputs and technological progress rate,and that there is a see-saw relationship between these two effects,with thelatter dominant.On that basis,this paper explains the dynamic transmission mechanism among finance,technology and economy.During theeeconomic expansion period,enterprises expand their production scale,financial resources providemoreesupport to productive investment,with less support to innovation investment,thus the technological progress rate goes down;and during the economic contraction period,enterprises reduce their production scale,ffinancial resources cut support to productive investmentand turn to innovation investment,SO technologicalpl rogress rategoes up.The implications of this study on policy are as follows:when faced with new contradictions and challenges in the current development stage,China should get a grip on the new development pattern,seize new opportunities,further deepen financial reforms,optimize the financial resource allocation mechanism,encourage innovation investment,and give full play to the role ofequity markets in supporting corporate R&D and innovation.Meanwhile,coupling with prudent and moderate macro-control policies,China should provide a positive macroenvironment for corporate innovation,stimulate corporate on innovation demand,promote technological progress,andboost high-quality economic development.
文摘China finds itself in a dual transitional period forboth its economy and its society with the govern-ment playing key role. The government is obliged tomaintain and reinforce its capacity to mobilize and allo-cate social resources, to maintain a stable developmentof both the economy and society.the paper,concernedwith the source of funds, has divided national capacityinto national fiscal capacity and national financialcapacity.By calculation and analysis of the fiscal ca-pacity and financial capacity,we will explain the role ofthe finance industry as "secondary public finance."
文摘The global financial crisis in 2008 thoroughly exposed the shortcomings of the existing international financial system, followed by rising initiatives on the international financial governance system reform. Unlike previous reforms, emerging economies as a group have gradually become an important participant in the current round of international financial reform, especially with the BRICS countries as the main representative. This paper argues that the BRICS mechanism is in a trial period, and whether it is capable to form a cohesive institutional actor to participate in international financial governance, and to completely change the long-term situation of international financial affairs dominated by developed countries under the framework of the G-20 depends on whether BRICS member states can continue to maintain a rapid economic development, to create a strong convergence of interests and to maintain a relatively closed nature of the mechanism.
文摘Over the past 40 years since the launch of reform and openingup,China’s finance has undergone substantial and fundamental changes in terms of size,structure and pattern as well as function,competitiveness,and international influence.Therefore,an accurate and comprehensive understanding of the current situation of China’s finance and its history in the last four decades is a prerequisite for deepening the reform and opening-up of finance and a foundation for establishing a modern financial system in China.This paper reviews the historical evolution of China’s finance over the past 40 years,focussing on the volume and market share of different types of financial assets,financing tools and mechanisms,patterns in and functions of finance,the risk structure in the financial system,financial opening,and the financial regulation model.It further proposes that in the future,China should establish a modern financial system characterised by‘large-economy finance’.
文摘This paper reviews the issues involved in moving towards greater exchange rate flexibilityand capital account liberalization in China. A more flexible exchange rate regime wouldallow China to operate a more independent monetary policy, providing a useful bufferagainst domestic and external shocks. At the same time, weaknesses in China’s financialsystem suggest that capital account liberalization poses significant risks and should be alower priority in the short term. This paper concludes that greater exchange rate flexibilityis in China’s own interest and that, along with a more stable and robust financial system, itshould be regarded as a prerequisite for undertaking a substantial liberalization of thecapital account.
