China‘s Financial Reform in the Context of Financial Stability and Efficiency

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     

Thoughts on the Reformation of the Enterprises＇ Financial Concept

Financial concept is the guiding ideology of all kinds of financial behaviors, and it is the foundation of enterprise financial culture. Now, Chinese enterprises have some low-efficiency, none - efficiency and even negative - efficiency financial behaviors. These block the enterprise from developing, and they are due to these none-rational financial concepts. To enhance firm＇s financial efficiency, and promote firm＇s sustainable development, we should set up scientific financial concepts. This paper discusses that scientific financial concepts should include： stakeholder benefits, trustworthy financial concept, green financial concept, risk management conceot and human -orientation, and so on.     

The Financial Support of Financial Institution to the Western Regional Economy under the Economic Structure Condition of the Geography Dual Economy

One of Chinese economy characteristics is the geography dual-economy structure between the westem and eastem area. A feasible method to improve the structure between the westem and eastem of our country is to study utilizing financial support, especially the financial support function of the medium and small financial institutions in the west, to accelerate the economic development of the western region.     

China： Unscathed through the Global Financial Tsunami

This paper investigates the reasons behind the resilience of China＇s economy to the global financial tsunami. China ＇s economy is lowly leveraged in its banking, household, public and external sectors and, therefore, is less plagued by the global deleveraging than most developed economies. Chinese domestic sectors have improved significantly over the past decade, giving them larger capacity to cope with external shocks than during the Asian financial crisis a decade ago. Contrary to the conventional wisdom that China＇s economic growth is highly dependent on exports, we find that the main growth engine for China is domestic demand. Destocking, rather than falling exports, was the main cause of the sharp economic slowdown in China in late 2008 and early 2009. Therefore, the global economic slowdown should have limited impact on China＇s economy. We forecast a sustained eeonomic recovery in China in 2009-2011, with real GDP growth exceeding 10 percent in 2010.     

Did the Recent Housing Boom Signal the Global Financial Crisis?

2005 prediction of the current global crisis followed from two key observations: (i) the recent housing booms in the United States and other advanced countries were not explained by economic fundamentals; and (ii) historically similar financial booms eventually collapsed, leading to recession. This article provides an empirical framework linking 2005 observations and crisis prediction. We utilize vector error correction models and panel probit and logit models to show that tracking a single variable, real house prices, was sufficient to predict the current global crisis.     

Structural Restriction in the Development of Chinas Financial Industry

I. IntroductionSince reform and opening up, the most significant achievements in the development of Chinasfinancial industry are manifested in quantitative growth, that is, rapid growth of the totalfinancial assets, and rapid scale expansion of the financial industry. Behind the gratifyingquantitative growth are hidden worrisome structural problems. Developing countries are inthe take-off stage in the development of their economy and finance, and it is the general rulethat quantitative expans…     

How to Determine the Financial Structure of an Enterprise

The financial structure is the proportion of every part of the capital in an enterprise. Whether the financial structure is scientific or not has an important impact on the risk degree, development prospect and profit-making ability of the enterprise. In this thesis, the author will discuss how to determine the financial structure of an enterprise scientifically.     

Financial Services in the Doha Round and China''''s Commitments

FinancialserviceswereincludedinthecurrentDohaRoundnegotiationsattheWorldTradeOrganization(WTO)aspartoftheefforttoexpandthecoverageoftheGeneralAgreementonTradeinServices(GATS).ThisagreementfirstappearedontheagendaoftheWTO,thenstilltheGATT,duringtheUruguayround(1986-1994).Whenitcameintoforcein1995,financialserviceswerenotcoveredbecauseofcontroversiesoverthestrengthofliberalizationcommitments.Asaconsequence,negotiationsonthisspecificservicesectorhadtobecarriedonaftertheofficialcompletio…     

Safety for Whom? The Scattered Global Financial Safety Net and the Role of Regional Financial Arrangements

The global financial safety net has undergone fundamental changes since the global financial crisis. The IMF introduced new facilities at the global level, new regional financial arrangements (RFAs) were created, and bilateral swap agreements emerged as a new element. In this paper, we ask how these changes influence the use of RFAs. We create a database with all the cases in which a RFA member drew on one of the elements of the global safety net. This allows us to analyze which other options the country had at hand and how their respective volume, timeliness, and policy conditionality affected their use. We find today’s global financial safety net to be not a global but a geographically and structurally scattered net with unequal access for three different groups of countries. Small countries can draw on their RFA. Only few countries can count on a bilateral swap line. The majority of the countries in our sample do not have several options to choose from. They have the IMF as their only source. We find that volume alone does not explain why countries choose a certain source of emergency liquidity. Even if “the big new” voluminous swap arrangements replaced RFAs in some cases, we find a complex pattern of complementary and substitutive use of the regional and other elements of the global safety net.     

Were Information Intermediaries Sensitive to the Financial Statement‐Based Leading Indicators of Bank Distress Prior to the Financial Crisis?

In this paper, we address two questions that emerged in the aftermath of the 2008 financial/banking crisis. First, did the financial statements of bank holding companies provide an early warning of their impending distress? Second, were the actions of four key financial intermediaries (short sellers, equity analysts, Standard and Poor's credit ratings, and auditors) sensitive to the information in the banks’ financial statements about their increased risk and potential distress? We find a significant cross‐sectional association between banks’ 2006 Q4 financial information and bank failures over 2008–2010, suggesting that the financial statements reflected at least some of the increased risk of bank distress in advance. The mean abnormal short interest in our sample of banks increased from 0.66 percent in March 2005 to 2.4 percent in March 2007 and the association between short interest and leading financial statement indicators also increased. In contrast, we observe neither a meaningful change in analysts’ recommendations, Standard and Poor's credit ratings, and audit fees nor an increased sensitivity of these actions to financial indicators of bank distress over this time period. Our results suggest that actions of short sellers likely provided an early warning of the banks’ upcoming distress prior to the 2008 financial crisis.     

Financial relations between the RSA and the independent and self‐governing states

The essence of the recent dispute between RSA and Ciskei lies in the financial arrangements between the two countries and in this article financial relations in Southern Africa are thus analysed.

It becomes apparent that the independent and self‐governing states have a limited own revenue base and that financial transfers from the RSA Government play an important role. These transfers should, however, not totally be seen as grants, since a large part of them stem from spillover effects that actually obligates the RSA Government to compensate the countries concerned.

One of the main problems is the arbitrary provision of requited transfers (obligations) and unreauited transfers (grants) as aggregate amounts such as the statutory and additional amounts. More use should also be made of conditional or specific purpose transfers. The present financial arrangements are far from optimal and can easily lead to misunderstanding and confusion.     

China and the Global Financial Crisis： Assessing the Impacts and Policy Responses

The present paper explores the role of China in the creation of the current global financial crisis and the impacts of the crisis on its economy. It argues against the view that the ＂saving glut＂ in China （along with other Asian emerging economies） played a significant causal role in the crisis. The global financial crisis did not engender much damage in China＇s financial structure, thanks to the relatively closed, bank-centered financial system. However, the impacts on the ＂real＂ side of the Chinese economy were hard felt. Growth and employment have fallen, largely due to the decline in exports and foreign direct investment. The crisis reveals the vulnerability of the export-dependent growth pattern. Policy responses of the Chinese Government, including monetary, fiscal and social policies, have helped to stem the downfall of the economy in the immediate term, but some of the policies have not addressed the structural problems of the Chinese economy and might well aggravate such problems over time. The present paper proposes a tentative reform blueprint to rebalance the economy and to sustain long-term growth.     

Reforming the Financial Health Care System： The Case of the Republic of Albania

The Albanian health care system is currently in a period of deep transformation as well as the country is reflecting the future reforms after the turbulent development of the most recent years. The admission of Albania among future members of the European Union requires also an innovation in the health care system in order to build a model more compliant with the European performance and standards. These innovations are required also in the managerial approach to the health care and in its financing system. The aim of this paper is to analyze the actual financing model of the Albanian health care sector while highlighting the possible future managerial development. First of all, this article presents a history review of the Albanian health-care system, analyzing the current governance model. The goal of this approach is to describe the starting point of the reform paths for the future policy makers. Afterwards the research underlines the transition from a financing model based on historical public expenditure to a system based on the performance as one of the main innovation in the managerial approach to the health care. The introduction of management thinking will then allow developing a cost-based financing model, an accounting system in the teaching hospital and, finally, a financing system able to pay for services provided by private health care entities. The article then offers also a contribution to policy makers in order to define the ＂paths＂ of the Albanian health care system in the next years.     

Structural Restriction in the Development of China＇s Financial Industry

After China‘s accession to the WTO, the main problem China now faces in its financial development is how to enhance international competitiveness while safeguarding financial security. Since reform and opening up, the development of China‘s financial industry has featured extensive quantitative expansion, but without sufficient consideration given to increased risk. This has led to serious defects in the financial structure, which has hampered the financial industry from further development and from improving its international competitiveness. All these have had unfavorable impacts on financial stability and security.Therefore, in developing China ‘s financial industry, the stubborn pursuit of growth in quantity is inadvisable. What is needed is to change this way of thinking and to promote reform and development of the financial industry with emphasis on structure improvement,and to seek a way of development that can raise international competitiveness, while at the same time ensuring financial security.     

Financial Services in the Doha Round and China＇s Commitments

Current negotiations on financial services at the WTO are concerned with improving liberalization commitments over the Financial Services Agreement which became an integral part of the General Agreement on Trade in Services (GATS) in 1997. Important underlying issues of these negotiations are member states‘ policy decisions in two particular areas: capital account liberalization and prudential regulation. These decisions not only determine the member countries‘ scope for liberalization,, the liberalization commitments in turn also limit the scope of national economic poliey in these two areas. Taking these characteristics offinancial services talks into account, there are two major goals for the ongoing negotiations:for industrialized countries to make progress with respect to trade business and for developing countries and emerging-market economies to concentrate on improving market access on an established basis. For China, the most important goal is to implement the far-reaching liberalization commitments that were made in the context of its accession to the WTO in December 2001.     

The Evolving Logic of the External Institutional Financial Organizations of China

Starting from the initial conditions of Chinese financial reform, the author tries to analyze the inherent logic why the External Institutional Financial Organizations （the EIFOs） steps into a tight comer. He points out that the financial marginal reform carried out by the country has no endogenous solution under the initial conditions such as the dominance of state-owned finance, lacking market basement for interest forming, no real finance price, the administrative approval system, and lacking market basement for financial supervision,     

International Financial Adjustment for China： A Financial Valuation Approach

International financial adjustment is the process whereby valuation shifts from asset price and currency changes result in relatively durable net wealth transfers across countries' international balance sheets. This paper applies a financial valuation approach to estimate the direction and the broad extent of recent international financial adjustments on China's international balance sheet. We estimate China's international balance sheet losses resulting from the valuation shifts over the period 2005–2010 and reveal that international currency shifts over the past decade have also generated a range of non‐balance sheet financial and monetary adjustment pressures for China. This paper also evaluates how China's evolving international financial policy arrangements could better mitigate China's exposure to international financial adjustments. These arrangements include a more effective currency mechanism and the mechanisms to internationalize the RMB to buffer international financial valuation shocks.     

Financial Globalization and the Increase in the Size of Government: Are They Related?

Open Economies Review - We employ a stochastic growth model to study the impact of international financial liberalization and changes in volatility on the share of government consumption in GDP....     

Has the Geek Financial Problem Triggered the Debt Problem in the Whole Eurozone？ An Analysis Based on Econophysics

The present paper analyzes the Greek financial problem shows the position of the Greek economy in 2009, the solution that has been chosen by the European Financial Authorities, the results of this process and finally, correlates the Greek financial problem with the Eurozone debt problem. More specifically taking into account the Greek financial macroeconomic data of 2008 and 2009, explains the measures that they have been taken to make the Greek General Government to be the zero deficit. Also examines the process of internal devaluation based on a price-income （P-Y） diagram and it is correlated with the thermodynamic one （Pressure （P）-Volume （V））. However, this process of internal devaluation emerged some important problems that the whole program to be in strong questioning by an important part of the Greek society. The paper shows the present macroeconomic position of Greece after three year austerity and analyzes the necessity of the structural reforms in Greek economy in order to make the public debt to be almost 120% at 2020. Furthermore, it has examined the financial problem of Eurozone concerning to the debt problem as well as and the source of this problem. It is proposed the solution of the inflation haircut that will take three years to make the average depth of Eurozone to be less than 70% and the Euro to remain the unique currency in the Eurozone. Finally, this work carried out calculations on macroeconomic data using methods from the field of non-linear dynamics.     

Causes of the Long Stagnation of Japan during the 1990s: Financial or Real?

Corporate investment is the most important factor to explain the long stagnation of Japan during the 1990s. Using the Bank of Japan diffusion indices of “real profitability” and “banks' willingness to lend,” we estimate investment functions for four groups of firms: large/small and manufacturing/non-manufacturing. Our results suggest that for large firms, financing constraints are not significant whereas the converse is true for small firms. A fall of investment during 1992–94 is largely explained by real factors. However, the credit crunch occurred beginning 1997 and it lowered the growth rate of GDP by 1.6%. J. Japan. Int. Econ., September 1999, 13,(3), pp. 181–200. Faculty of Economics, Nagasaki University, 4-2-1 Katafuchi, Nagasaki 850-8506, Japan; and Faculty of Economics, University of Tokyo, 7-3-1 Hongo, Bunkyo-ku, Tokyo 113-0033, Japan. Copyright 1999 Academic Press.Journal of Economic Literature Classification Numbers: E22, E30, G21, N15.