...Topic: China’s financial liberalization Title: China’s financial liberalization and the policy transformation towards openness Author: Xuepan Cheng 4136801 Abstract This paper focused on the research of China’s financial liberalization reform in order to discuss the economic and financial effects casted by financial liberation. Also the article pointed out the current problems of China’s financial system and provided suggestions for implementation. The main argument of policy suggestions for China is to further lower down the financial limits, so that China will be able to build a better foundation for financial liberalization. Also the effective and constant supervision and modification of the financial regulation system is also necessary for maintaining a healthy macroeconomic environment and continuing capital flows. While the economic globalization, and financial liberalization has become a major tendency that attracts a lot of people’s attention in world economic development since the 1980s, the financial liberation and reform has become a necessity for China to develop it’s financial market and economy wellbeing. 1. Introduction China, as one of the fastest expanding economy in the world, is largely owing to the economic globalization, and financial liberalization since the 1980s. Economic globalization refers to the fact that economic resources (goods, capital, labor, technology, information and other transactions) flow from one country to another. This tendency makes...
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...Caijing Magazine July 3rd, 2009 The institutional development of Chinese capital markets has lagged – while a growing body of academic literature has demonstrated the positive linkages between the development of capital markets and economic growth, China has managed to grow at a breath-taking 10% CAGR over the last 30 years despite lacking commensurately developed capital markets. Several announcements in the past months suggest a potential shift – China may be finally paving the way to modernize and open up its capital markets, a process that has been long in the making. This time however, a date has been set with the announced objective of turning Shanghai into a global financial hub by 2020. In order to achieve that goal, several seminal changes will need to take place. Foremost among these will be convertibility of the Rmb and opening up of equity capital markets to foreign investors beyond the tightly controlled QFII program in existence. A set of domestic-oriented reforms, including a broadening of financial service offerings, will also be critical to the transformation. While the US-borne financial crisis has triggered much soul-searching in developed economies and a vigorous debate on reforms of financial institutions, it has had none of that effect in China. If anything, it appears to have accelerated plans to reform Chinese capital markets. At a high level, this can be seen as part of a broader effort to assert China’s naturally evolving role as a major economic power...
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...Topic: Institutions and Economic Reforms Wendy Carlin This topic focuses on the role of institutions in economic growth and the implications of this for the design of economic reforms. We examine why some large-scale economic reforms have been surprisingly successful and others have been disappointing. It will be argued that the consistency between existing institutions in the economy and the reforms is an important factor in determining reform success. We look at property rights and contracting institutions, at the experience of transition economies – both in the former Soviet bloc and China and at reform policies including privatization. The empirical techniques that we study include cross-sectional and panel regressions using aggregate (i.e. country-level) data and micro-economic data. Key readings: Institutions and growth: Acemoglu, D., Johnson, S. and Robinson, J. A. (2001) (AJR) “The Colonial Origins of Comparative Development: An Empirical Investigation”. The American Economic Review, Volume 91, Number 5. Use the UCL Economic Journals page and choose the Atypon link. Acemoglu, D., Johnson, S. (2005) (AJ) “Unbundling Institutions” Journal of Political Economy Volume 113, Number 5, 949-995. Use the UCL Economic Journals page. Deaton, A. (2009) ‘Instruments of Development: Randomization in the Tropics and the Search for the Elusive Keys to Economic Development’. NBER Working Paper 14690. Use google. Transition: China and Russia Qian, Y. (2003). “How Reform Worked...
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...1949 and is still present in the country’s activities. Presently China is undergoing incredible economic growth and promises to be a dominant power early in the next century. China’s social tradition has come under heavy pressure from forces of modernization generated in a large part by the sustained contact with the West that began in the middle of the nineteenth century. The Western incursion, not only refined China militarily but brought in its course new ideas- nationalism, science and technology, and innovations in politics, philosophy, and art. Chinese leaders have sought to preserve the nation’s cultural uniqueness by promoting specifically Chinese blends of tradition and modernity. China has undergone several major political transformations from a feudal-like system in early historical times, to a centralized bureaucratic empire that lasted through many unpredictable changes till 1911, to a republic with a communist form of government in the mainland since 1949. Economic geography and population pressure help account for the traditionally controlling role of the state in China. The constant indispensability for state interference, whether for great public works programs or simply to keep such a large society together, brought up an authoritarian political system. The family prevailed as the fundamental social, economic, and religious unit. Interdependence was very prominent in family relations while generation, age, sex and immediacy of kinship strictly governed relations...
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...Corruption and China’s Economic Reform in the Early 21st Century by Gregory C. Chow, Princeton University CEPS Working Paper No. 116 October 2005 Acknowledgement: I would like to thank Steven Kou of Columbia University and Yan Shen of Peking University for helpful comments and the Center for Economic Policy Studies at Princeton University for financial support in the preparation of this paper. Abstract Past economic reform of the state sector in China consisted mainly of privatization, of agriculture and of small and medium-size state enterprises, leaving large state enterprises in the control of the state. Current reform consists of making state-owned enterprises and banks more efficient and functioning like private enterprises, and gradual privatization of some large state enterprises. Bureaucrats managing state assets and the selling of assets take advantage of such power to benefit themselves, including embezzlement of public funds and taking bribes from citizens needing their help, as can be found in state enterprises, state-owned commercial banks and in government projects. Reducing the size of the government sector is a basic solution to the corruption problem in China while attention should be paid in the privatization process which can involve corruption. Outline 1. Introduction 2. Review of Past Reform Measures and Current Problems 3. Enterprise Reform Hindered by Bureaucratic Behavior 4. Reform of Banking and Financial System Hindered by Corruption ...
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...A Partnership of Equals: How Washington Should Respond to China’s Economic Challenge By C. Fred Bergsten, Peterson Institute for International Economics Article in Foreign Affairs July 2008 This article is adapted from the forthcoming book China's Rise: Challenges and Opportunities. To be an economic superpower, a country must be sufficiently large, dynamic, and globally integrated to have a major impact on the world economy. Three political entities currently qualify: the United States, the European Union, and China. Inducing China to become a responsible pillar of the global economic system (as the other two are) will be one of the great challenges of coming decades—particularly since at the moment China seems uninterested in playing such a role. China has a profound interest in seeing that the international rules and institutions function effectively. The United States remains the world's largest national economy, the issuer of its key currency and in most years the leading source and recipient of foreign investment. The European Union now has an even larger economy and even greater trade flows with the outside world, and the euro increasingly competes with the dollar as a global currency. China, the newest member of the club, is smaller than the other two but is growing more quickly and is more deeply integrated into the global economy. Its dramatic expansion is therefore having a powerful effect on the rest of the world. (China is often paired with India in such...
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...Analyze the Effects of Financial Globalization on China's Financial System Introduction With the development of financial globalization, the free flow of international capital contributes a lot to the development of the world economy, however, many short-term speculative capital wandering around the world with rapid speed and complex means have impacted on developing countries’ financial markets, which constantly induce financial instability and crisis. And fluctuations due to capital flows also makes the international financial turmoil have a huge ripple effect and zoom effects. Financial globalization has exacerbated the instability and the risk of global economy and financial development, so financial security is increasingly becoming an important part of national security .In this essay, we are going to talk about the impact of financial globalization on China’s financial market and what the measures will be taken to ensure the security of China’s economy. The main performance of financial globalization 1. Globalization of capital flows is the most prominent manifestations of financial globalization. Since the 1980s, the scale of international capital flows has continueally expanded, while financial technology and financial innovation and the development of various financial derivative helps accelerate the speed of cross-border flows of international capital. By using computer and modern finncial technology, on one hand hundreds of millions of funds can move...
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...Globalization and China’s Economic and Financial Development (Preliminary draft– not to be quoted 9/8/05) Gregory C. Chow To understand China’s economic reform and development since 1978 one may conveniently divide the topic into its domestic and international aspects even though the two are closely related. It is the purpose of this essay to examine the international aspects as China has taken part in the process of world economic globalization, a salient feature of world history today. The Chinese leader Deng Xiaoping who initiated and directed economic reform from a planned to a market economy understood the importance of globalization and adopted what he called an “open-door policy” as an essential part of the reform program. The term globalization refers to the crossing of national boundaries. It means the flow of goods, capital, information/technology and people across national borders. China practiced globalization in the Han dynasty (206BC-220AD) when trade took place between the Han Chinese and neighboring people in the North-west through the Silk Route. During the Tang dynasty (618-901) trade flourished and the Silk Route expanded as Chinese traded with the Romans. However, in the Qing Dynasty and in the period of the PRC up to Deng Xiaoping’s open-door policy China tried to close its doors and resisted globalization. I will survey the accomplishments of globalization for China’s economic...
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...CHAPTER 2 ENRIRONMENTAL INFLUENCE ON ACCOUNTING DEVELOPMENT 1 2.1 Introduction In international accounting research, environmental influence is the key to understanding one country’s accounting system. "To a large extent, accounting is a product of its environment. That is, it is shaped by, reflects, and reinforces particular characteristics unique to its national environment" (Radebaugh and Gray 1997). From the late 1960s, researchers in international accounting have tried to categorize countries according to a series of criteria, which have been developed on a deductive or conductive basis. These criteria tried to explain the reasons for accounting differences between countries; they aimed to describe and compare different systems with each other in an efficient way. There are several advantages to categorize and analyze the differences among countries: First, it promotes improved understanding of the complex realities of accounting practices, as well as the factors that shape a country’s accounting regulations; Second, it provides useful information for solving some of the important accounting problems that exist in the world. For example, it can help policymakers assess the prospects and problems of international harmonization; Third, it can assist in the training of accountants and auditors who operate internationally; And finally, it can enable a developing country to better understand the available and appropriate types of financial...
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...CHINA’S NEW CONCEPT FOR DEVELOPMENT Jiyao Bi1 INTRODUCTION In the first 20 years of the 21st century China is entering a new development stage to comprehensively build a prosperous society and to accelerate its modernization drive. China views these two decades as a period of great strategic opportunity which should be pursued vigourously. From an international perspective, peace and development remain the central themes of our era, and China is working to achieve this peaceful environment for development. From a domestic perspective, 25 years of economic reform and opening up have laid a solid basis for development, and China has achieved favourable conditions to accelerate development. However, opportunities are always accompanied by challenges. A key challenge for China is to adopt new thinking and ideas for development and make a new breakthrough in reform, so as to tightly grasp and make a full use of this opportunity to further promote its modernization drive. I. CHINA’S DEVELOPMENT TRENDS AND ISSUES China has experienced rapid economic growth since the late 1970s when economic reform and opening policies was initiated. From 1978 to 2004, China’s GDP grew by a yearly average of 9.5 per cent, the highest levels of GDP growth in the world. China has successfully maintained its sustained and rapid economic growth in recent years by improving and strengthening macro-control policies. Confronted with the external shocks of the Asian financial crisis of 1997–1998 and...
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...First of all I will discuss China’s historical background and its need for reform and also how economic reform started out in 1978. Then I will go on to cover the four major economic institutions that needed to be reformed in order for China to become a market economy. These four major economic institutions will then be discussed in detail. This paper will then go briefly into China joining the WTO and will conclude with China’s economic situation at present. Chinese economic policies and institution have undergone a number of extreme changes since the establishment of the Communist regime in 1949. After the Communist Party took national power in 1949, the disorder caused by the imperialist invasions and domestic wars were put to an end and China began to strive for development by following Russia’s example in pursuing Leninist and Marxist doctrine. By following this doctrine they would replace free market and private ownership with socialist planning and public ownership. In order for this to become a reality China had to pursue radical revolutionary domestic and foreign policies to overcome the resistance to the Chinese Communist movements. After closing its doors to western concepts of capitalism and free market economy it seemed like China was doing well but it was soon evident that the rigid planning and the command market economy was becoming inefficient. In contrast to the western economies China was indeed falling behind. Even China’s neighbors such as Taiwan, Singapore...
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...recovering from the chaos of long conflicts both internally and with Japan. As a result, Chinese health conditions had declined, with health indicators at the lowest level compared with other countries at a comparable level of development (World Bank, 2004). In this period, communist party who have the whip hand support the model of the 20th century communism ideology, and trust people should to be represented by the government, should have all production together: without the private department. Formation of the Chinese healthcare system. Therefore, since 1949, the Chinese government has gradually established a free medical care, labor insurance and cooperative medical care system as the main content of the health care system, and initially formed a socialist country's health care system. The government owned, funded, and ran all health care facilities, including large hospitals in urban areas and small township clinics in the countryside. All providers were employees of the state. Meanwhile, private health practice and private ownership of health facilities disappeared along with other private business. Development of Chinese healthcare system In 1950, at the First National Health Work Conference, the central government announced four fundamental principles for medical and health work: service for workers, peasants,...
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...Can institutional reform provide a sufficient explanation for China’s rapid economic development over the past three decades? What needs to happen in order for growth and development to be maintained in the future? The People’s Republic of China is the world’s fastest growing economy following the economic and institutional reforms from 1978 which signaled the beginning of an economy in transition. This shift from a centrally planned system to a market oriented economy resulted in an overall improvement in China’s living standards and productivity. Since then, China has extensively engaged in a range of international organisations and agreements, such as, the participation in the World Trading Organisations, as well as increasing their level of foreign trade and investment, formation of rural enterprises and private businesses, financial flows and globalisation. These are the fundamental reasons for China’s rapid economic growth over the last three decades. There are various definitions of economic growth, however, according to WebFinance (2012) economic growth is referred to the “increase in a country's productive capacity, as measured by comparing gross national product (GNP) in a year with the GNP in the previous year”. Prior to 1978, China’s average annual growth was at a low 6% and with negative declines of up to -27% in 1961. Since the reforms, GNP has been positive and steadily increasing with fewer ups and downs (Hu and Khan, 1997). The Chinese economy has been averaging...
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...This article was downloaded by: [University of Hong Kong] On: 7 July 2010 Access details: Access Details: [subscription number 905437243] Publisher Routledge Informa Ltd Registered in England and Wales Registered Number: 1072954 Registered office: Mortimer House, 3741 Mortimer Street, London W1T 3JH, UK Journal of Contemporary China Publication details, including instructions for authors and subscription information: http://www.informaworld.com/smpp/title~content=t713429222 The China Model: can it replace the Western model of modernization? Suisheng Zhao Online publication date: 28 April 2010 To cite this Article Zhao, Suisheng(2010) 'The China Model: can it replace the Western model of modernization?', Journal of Contemporary China, 19: 65, 419 — 436 To link to this Article: DOI: 10.1080/10670561003666061 URL: http://dx.doi.org/10.1080/10670561003666061 PLEASE SCROLL DOWN FOR ARTICLE Full terms and conditions of use: http://www.informaworld.com/terms-and-conditions-of-access.pdf This article may be used for research, teaching and private study purposes. Any substantial or systematic reproduction, re-distribution, re-selling, loan or sub-licensing, systematic supply or distribution in any form to anyone is expressly forbidden. The publisher does not give any warranty express or implied or make any representation that the contents will be complete or accurate or up to date. The accuracy of any instructions, formulae and drug doses should be independently...
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...How China rises What lessons can be drawn from China's spectacular and sustained economic growth? As Hu Jintau remarked at the 17th Congress of the Chinese Communist Party, the period since the previous Congress five years ago has been extraordinary. China's economic achievements have been arousing not only astonishment and admiration but also some anxiety. In the past twelve months alone, The People's Republic of China (PRC) has overtaken Canada as the biggest source of imports to the USA, and overtaken the USA as the biggest source of imports to the European Union. Concern about the low level of investment in Africa has been displaced by concern about the effects of the high level of Chinese investment in Africa; there is now even anxiety about the effects of investment by Chinese state-owned firms into the Western economies. The Chinese Communist Party is also expressing concerns. The themes of its 2007 Congress included protection of the environment and the achievement of social harmony. According to some estimates, China has displaced the USA as the world's biggest source of greenhouse gases. Inequality is rising as fast as pollution: China now has over 800 individuals with a personal wealth of more than a hundred million US dollars each, up from 500 in 2006; while the average income in rural areas of China is 480 dollars per year. Made in China. Hu Jintau's remark on the extraordinary nature of the most recent years can be faulted in only one sense: China has...
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