China''''s Pension Reform and Capital Market Development

I. IntroductionThere is a close relationship between the pension system and the capital market, which ismost evident in developed countries where pension funds, with large amounts of assetsare the key institutional investors in the capital markets.1 In recent years we have witnessedthe reform of pension systems from pay-as-you-go (PAYG) to funded systems in someLatin American and East European countries, where retirees pension benefits come mainlyfrom their individual accounts, not from the…     

Seeking for Balances between Deficits and Competitive Advantage： Looking into the American Financial Market and Policies in Advance after the Presidential Election

The American financial market plays a remarkable role as one of the global core markets, but many changes have taken place in recent years. The policy of White House becomes one of the variables deciding the direction of the market movement. After the Presidential Election, the financial market will move in the effect of anticipating the policies in next phase. For the uncertainty during the resuscitation, the financial policy is facing the problem that how to be an assistance in keeping the economic growth, and how to seek for balances in the contradiction between controlling deficit and maintaining competitive advantages. After the comprehensive analysis on American financial market, the possible result could be like this： interest rate will rise gradually again, exchange rate will fluctuate in perch, but the price of the assets in capital markets will show the difference according to the market framework. The analysis aiming at market and policy can impossibly be built on the base of the hypothetical close system. If no ideal adjustment emerges in American foreign policy in the future, the financial market will possibly turn into another disordered circle.     

The NDC Model： A Way to Resolve Moral Hazard in China＇s Social Security System

Since the mid-1990s, China has adopted a partially funded pension scheme in building its social security system. However, after nearly 10 years of operations, people found that the serious moral hazard problem of contribution defaults and loss of control concerning pension payment stemmed from this partially funded pension scheme. This institutional arrangement has also resulted in the so-called “adverse selection in non-market institutions”,which in turn is capable of destroying the current system. This article argues for the introduction of the Notional Defined Contribution (NDC)scheme, because it can solve the problem of moral hazard and adverse selection. Moreover,it can solve the problem of a lack of institutional conditions for the entry of the social security fund into the stock market. It is important to note that the NDC scheme fully conforms to the initial intention of the policy-makers who designed the partially funded pension scheme in mid-1990s.     

Thinking on the withdrawal mechanism of venture capital in China

From the operating mechanism of venture capital, we can see that, the withdrawal mechanism of the venture capital plays a decisive role in the ultimate success or failure of the venture capital. One of the key issues affecting the development of China＇s venture capital industry is that the withdrawal mechanism is not sound. In referring to the foreign successful experience, we must fully analyze it by integrating with the actual situations of China. Currently, the capital market, property market, venture capital system and legal system of China are not perfect, and the improvement of the mechanism can not be done overnight. We can first choose to withdraw in a practical way in the current stage to gain the time to develop, and then continue to pave the way to create conditions, and finally establish a perfect venture capital withdrawal mechanism.     

Target costing as a strategic cost management tool for success of balanced scorecard system

The precondition of gaining and sustaining competitive advantage for companies that operate today＇s competitive markets is the effective cost management. Since price is determined by the market, the ways of increasing profits are productivity and cost reduction. Balanced scorecard system is accepted by academicians and practitioners as an effective strategic management tool for applying the strategy successfully. In the financial perspective of the balanced scorecard system, cost reduction is a strategic objective. It is necessary that company＇s cost reduction strategy should not only be a reaction to the market, but also a continual strategy. The approach which aims to the reduction of costs that reveal along product life cycle and preset this aim at the design stage is target costing （TC）. TC can be used as an effective tool in BSC＇s financial perspective for the objective of cost reduction. In this study, the authors aim to display how to integrate the TC to BSC.     

对盈利质量的需求与中国资本市场的基本面分析

It was reported that Chinese fund managers are patiently planning for the long-term with expectations that China‘s market conditions will improve, recognizing that regulators continue to take steps to improve corporate transparency. This paper discusses the relevance of high quality publicly available earnings information, how accounting standards influence the quality of reported earnings, and how capital market participants act as monitoring forces for earnings quality. Using the U.S. market as a benchmark, this paper considers earnings quality characteristics and monitoring forces in the context of the Chinese market. My overarching premise is that high quality analysis of high quality accounting information is crucial for the efficient flow of resources through a capital market. Thus it is instrumental to the growth of China‘s financial market and its economy. To this end, the paper summarizes potential impediments to high quality earnings and high quality analysis in China.     

Financial Development, Economic Growth and Adaptive Efficiency： A Comparison between China and Pakistan

The strong economic growth in China is difficult to reconcile with its inefficient financial system. The puzzle of China＇s financial development and growth can be explained through a dynamic criterion of adaptive efficiency, rather than through allocative efficiency. Using the framework of an autoregressive distributed lag model, the present paper tests the hypothesis that the GDP growth rate is dependent on financial development along with other variables in China and Pakistan. The hypothesis cannot be rejected in both cases. However, the results show that economic growth has a negative relationship with credit to the private sector in China. We conclude that financial development is a source of China＇s high growth rate and that the banking system is still under an evolutionary process, involving the pursuit of social objectives instead of the sole objective of profit maximization. Our results provide some implications for other developing countries like Pakistan.     

Capital structure： The Italian market perspective

This article first investigates the determinants of＂capital structure＂ and the extent to which financial structure policy contributes to the creation of shareholder value in Italian companies through a survey of 76 CFOs of Italian listed non-financial companies, and revealed that the key driver is the quest for financial flexibility, necessary to combine effectively capital structure policy with the other two levers of value creation, investment policy and payout policy. These three value creation drivers are autonomous, but this empirical study reveals a clear hierarchy that links liability policy （capital structure and payout） to asset policy （investments） leading companies to make sub-optimal financial structure decisions that may not minimize the weighted average cost of capital, though ensuring the financial flexibility necessary to activate their principal lever of value creation, investment policy, effectively and without excessive constraints. A major finding in a subsequent benchmarking exercise is that Italian ＂family capitalism＂ affects corporate governance and therefore capital structure decisions. This finding may not be restricted to the Italian market, but could apply to all countries in which ownership structures are centered on very few shareholders with weak financial market control and where banks often play a crucial role in the governance of companies.     

Does Foreign Direct Investment Provide Desirable Development Finance？ The Case of China

Foreign direct investment (FDI) is often considered as a cost-effective and risk-reducing source for development finance. This paper,however,shows that FDI finance often entails underestimated risks and costs. FDI might react sensitively to business cycles and might not be as "permanent" as conventionally believed. FDI might also accelerate other forms of capital flow in times of financial difficulties and,hence,destabilize financial order. In addition to the risks,compensations to FDI and the high import-dependency of FDI-related trade lead to a considerable drain on the balance of payments. Moreover,the reliance on foreign capital for development finance is equivalent to building a Ponzi financing scheme and,therefore,is unsustainable. Given the fact that FDI financing is risky and costly and China does not lack savings,it is suggested in the present paper that China's efforts in attracting FDI should not aim at external capital provisioning.     

Corporate Governance of Enterprise Groups in China

Clear property right is the core of modem enterprise system, but it can＇t become all-powerful medicine to an enterprise because many enterprises with clear property rights in some countries can＇t avoid bankruptcy in market competition yet. Good corporate governance as a system arrangement will be good to the organization management operation. The research to the corporate governance of enterprise groups will be advantageous to corporate groups＇ standard operation. But the existing research is almost pointed to single enterprise not enterprise groups. The structural complexity of enterprise groups will increase the difficulty in corporate governance. The paper is based on and oversteps the traditional corporate governance theories to research the corporate governance of enterprise groups. We try to summarize the domestic and foreign correlation materials in order to provide the argument basis for the research to the corporate governance of enterprise groups.     

英文文摘

Cultural and Creative Industry Development China Rethinking
At present, the fundamental issue of China＇s economic structure is to resolve the contradictions. The new urgent consumer market needs to be expanded and the new demands hot spots urgently need to be created. In this financial crisis, China＇s economic development has to not only solve the internal and external structural imbalances but also stimulus the formation of new growth engines.     

Reform of China＇s Pension System

This paper mainly analyzes development and reform of China‘s pension system. It introduces the evolution of China‘s pension system reform and discusses its strengths and problems.The paper then proposes some suggestions on the direction of China‘s pension reform. The last section is devoted to a discussion of China‘s corporate occupational pension, which is a fast-developing area of the pension system.     

internationalization Strategies for China＇s Construction Enterprises

China＇s accession to WTO brings about fresh opportunities for China＇s contractors to further participate in the international contracting market. Meanwhile, China＇s local market will also further be opened up to the external contractors. That means the competition will be fiercer. In comparison with their foreign counterparts, China＇s construction enterprises have comparatively low competitive ability. Therefore, the author tries to analyze the influence factors that prevent the development of China＇s construction enterprises. And then a number of strategic measures have been discussed in this paper in order to strengthen the core competence of the enterprises, such as talents recruiting, capital management, cost control, innovation of management means and strengthening cooperation and recombination, etc.     

On the Demand for Earnings Quality: Implications for Fundamental Analysis in China

I. IntroductionIn 2003, China launched a $15.7 billion investment fund to shore up a weak pension systemand up to 40 percent of the investment fund will be put into Chinas stock markets. Chinesefund-management companies, selected to invest a portion of the pension funds in stocksand bonds, now have the task of finding quality companies. An August 2003 Wall StreetJournal article indicated that the fund managers are patiently planning for the long-termwith expectations that Chinas market co…     

Financial Imbalance Index as a New Early Warning Indicator： Methods and Applications in the Chinese Economy

Based on the stylized facts of financial crises and systemic risk accumulation, this paper constructs a new financial imbalance index （FII） from the perspective of endogenous financial cycles and assesses its application in China＇s macro-financial analysis. The results show that the FII is not only an effective index to detect financial imbalances in China＇s economic cycles, but is also more accurate than and plays more of a leading role than conventional indicators, such as the consumer price index, the financial conditions index and the purchasing managers indicator. Empirical analysis shows that the FII can be used as an effective indicator to measure systemic financial risk, and can provide policy-makers and market participants with useful information to make appropriate decisions.     

An Overview of China’s Bond Markets

I.Introduction China's success in developing a fully functioning capital market depends in large part onwhether it succeeds in establishing a thriving market for bonds.The government has,untilrecently,restricted the types of bonds that can be issued in China.But China has realizedthat there are powerful financial reasons to promote the expansion and deepening of theChinese bond market.Among the most important are,first,that bonds would be desirableadditions to the portfolios of Chinese insur…     

Effectiveness of Capital Controls and Sterilizations in China

Since 2003, China has been facing a trilemma of determining how to maintain independent monetary policy and limit exchange rate flexibility simultaneously, while facing persistent and substantial international capital flows. The present paper is an empirical evaluation of the effectiveness of China＇s sterilizations and capital mobility regulations, measured by sterilization and offset coefficients, respectively, using monthly data between mid-1999 and March 2009. We find that the effectiveness of China＇s sterilizations is almost perfect in terms of the monetary base, but not in terms of M2, and that China＇s capital controls still work but are not quite effective. Recursive estimation reveals that increasing mobility of capital flows and decreasing effectiveness of sterilizations might undercut China＇s ability to maintain monetary autonomy and domestic currency stability simultaneously. To solve the trilemma smoothly, China＇s monetary authority should continue to relax the management of the exchange rate, and take further steps towards deregulation of capital outflows.     

Research on CRM Strategy Implementation of Banking in China

With China entry into WTO and opening of the financial markets, banking industry will be sure to be faced with drastic competition from foreign banks that have apparent competitive advantages Over native banks in such aspects as capital, technology, operation, management and innovation. Especially, they have abundant experience in CRM. Up till now, native banks are in their first step on implementing CRM. To establish competitive advantage, native banks must change their operation idea and reinforce the construction of CRM. This paper analyzes CRM implementation characteristics of banking in China, put forward a new CRM strategy system of banking in China, and then points out some problems deserve attention in bank＇s CRM implementation     

How to rescue the environment： The uncommon idea

Successful solution to any environmental problem implies working with Knightian uncertainty that explicitly deals with decision making under conditions of unstructured randomness. Nature did not endow us with clear set of laws. A ＂wild＂ type of randomness that we will never discern due to its unstable properties makes the assignment of corresponding probabilities impossible. For that reason, the consideration of general economical factors within cost/benefit analysis must fail. So, instead of governmental imervention and cup and trade scheme, we propose direct financial market out of certificates on environmental improvements. They could be applied unaided by a model specification. The approach is based on Principal-Agent method. We propose to fill a huge gap in what is called Free Market Environmentalism （FME）, and make the proposal of financial market property rights for situations when ＂property＂ rights can not be set.     

Analysis of China＇s Renewable Energy Development under the Current Economic and Technical Circumstances

At present, the development of renewable energy relies mainly on government support. The government invests in a considerable number of projects to improve public welfare and to assist in poverty relief If China is to replace fossil fuels on a large scale with renewable energy sources, the production costs and prices of renewable energy must be brought down. All countries are facing the challenge of moving to a more secure and low-carbon energy system without weakening economic and social development. In this regard, China is facing an even greater challenge in terms of economic cost, as cheap coal remains the main energy form. Technical innovation and industrialization in the area of renewable energy is an important means of lowering cost. China is in for a period of high-speed development of its economy and the rising demand for energy is irreversible. If the technical progress and development speed of renewable energy lags behind the growth in demand, it will be difficult to realize the improvement of its energy structure.