Review and Analysis on China’s Economy in 2007

YAO Shu-jie1， 3， WEI Kai-lei2， CHEN Min-jia3

2. Business School， Middlesex University， UK;

3. School of Contemporary Chinese Studies， University of Nottingham， UK)

Abstract: With China economic growth data in recent years， this paper analyses the issues caused by executing the new economic policies promoted by the Seventeenth National Congress of the Communist Party of China. Then it analyses important events incurred in 2007. Finally， we give some recommendations on the successful implementation of the new policies.

Key words: The 17th National Congress of the Communist Party of China; Chinese economy

Government Function and Investment Regime: Empirical Study Based on Multi-country Data

CAI Yue-zhou1， YANG Ke-quan2

(1. Institute of Quantitative and Technical Economics， Chinese Academy of Social Sciences，

Beijing 100732， China; 2. Shanghai Lixin University of Commerce， Shanghai 201620， China)

Abstract: The functional boundary of government has decisive influence on the formation of investment regime. The investment regime and elements， such as government function， development stage and strategy， and economic structure， is dynamically interacted. Some trends are anticipated in China in the future: (1) Government will mainly focus on investment in public services; (2) Market mechanism will be introduced even in government investment; (3) Government will mainly use indirect policies to regulate investment behaviors; (4) Portions of direct financing will increase while portion of fiscal expenditure may show inversed U shape; (5) Intermediary agency will play a more important role.

Key words: Government function; Investment regime; Investment entities; Capital structure

Toward IPR Protection， Technology Innovation and the Cause of International Trade Friction

LI Chun-ding1， YIN Xiang-shuo2

(1. School of Economics， Fudan University， Shanghai 200433， China;

2. Institute of World Economic Research， Fudan University， Shanghai 200433， China)

Abstract: Related literatures mainly research the relationship between intellectual property rights (IPR) protection and technology innovation or solely analyze the IPR protection disputes， paying little attention to trade barriers and technology innovation. The paper extends a North-South trade model and concludes that reducing trade barriers of the South can inspire technology innovation and makeup the IPR protection， which gives a new explanation to trade friction. Meanwhile， our model shows that the trade barriers of the North have no inspiration to technology innovation， which is different from previous literatures.

Key words:Intellectual property rights; Technology innovation; Trade friction

Toward Success Illusion and Over-Concentration of Production and Population

FAN Hong-zhong， WANG Xu-guang

(School of Economics， Huazhong University of Science and Technology， Wuhan 430074， China)

Abstract:Most people feel that chances of success in large cities abound. However， the fact is the minority of people from large cities can achieve career success. Thus there exists success illusion that may lead to improper decision regarding employment locations. This article finds that success illusion and the insensitivity of transport and housing cost for those who seek employment are the two market mechanisms of over-concentration of production and population. The over-concentration of production and population would lead to 1 prosperity， i.e. rapid GDP growth with large social output consumed by transport and housing costs. Thus the scale mechanism of urban development would not be necessarily effective.

Key words:Over-concentration; Success illusion; transport and housing cost

Toward Government Driving of Non-Agriculture Usage of Rural Land in Urbanization: An Analysis Based on Cities Panel Data in China

ZHANG Liang-yue1，2， SHI Bo1， LIU Dong1

(1.School of Economics， Nanjing University， Nanjing 210093， China; 2.School of Business Administration，

Anyang Normal College， Anyang 455000， China )

Abstract: Using panel data of 264 cities， the paper analyses the factors of non-agriculture usage of land with fixed effect model. We find that competition among cities regarding real estate， economic growth and public goods leads to pressure of non-agriculture usage of rural land. Collegiate expansion， development zone and other forms of land usage consist of potential accelerating factors as well as important land demand in cities. This shows that government diving behaviors in this aspect is obvious.

Key words:Urbanization; Non-agriculture usage of rural land; Government driven

Toward Financial Operation of China Hog Industry

YANG Zhi-huang

(School of Economics， Zhejiang University， Hangzhou 310027， China)

Abstract:China hog industry is confronted with natural， epidemic and market risks.This article proposes financial operations to counter these risks. We put forward the rationale of financial operations in the hog industry， and then discuss ways to construct the financial mechanism and finally focus on the construction of logistics regarding financial tools.

Key words:Hog industry; Risk; Financial promotion; Futures; Insurance; Banking; Logistics

An Empirical Analysis of Financial Development and Economic Growth in China

CHEN Wei-guo， ZHANG Hong-wei

(School of Economics， Sichuan University， Chengdu 610064， China)

Abstract:Based on the theory of the financial repression and financial structure， this paper applies the VAR Granger causality tests and Variance decomposition analytical tools to examine the relationship between financial development and economic growth in China. The conclusions indicate that: (1) significant positive relationship exists between financial development and economic growth; (2) there exists only single-direction causality between financial development and economic growth and the economic growth leads to financial development for model one， there is no causality between financial development and economic growth for model two and the financial structure dominated by banking system indirectly influences the economic growth; (3) financial structure is more stronger than financial repression in explaining economic growth. Thus， we should put more emphasis on financial institution reform to coordinate financial development and economic growth when we stress market forces in allocating financial resources.

Key words: Financial development; Economic growth; Financial repression; Financial structure

The New Political Economy of Urban-Rural Financial Resources Disparity in China

CHEN Gang1， YIN Xi-guo2

（1. College of Economics， Southwest University of Political Science Law，Chongqing 401120， China;

2. Economic Development Institute for China Under-Development Region， Chongqing University， Chongqing 400044， China）

Abstract:This paper puts forward a political economy viewpoint for the urban preference of financial resource allocation and the outflow of rural financial resources. We hold that the financial institution arrangement endogenously originates from government needs to grant benefit compensation in China economic reform. Under such an endogenous financial institution arrangement， the allocation of financial resources is provided with strong government intent that results in urban-biased allocation of financial resources. On the other hand， such endogenous financial institution arrangement may lead to interest rate repression， monopoly bank structure， and rural financial repression that would enforce the urban-biased allocation of financial resources and the outflow of rural financial resources.

Key words:Benefit compensation; Financial resource; Urban-Rural disparity; Political economy

Toward Institutional Innovation of Endowment Insurance Fund Operation in Rural Area

SHANG Chang-feng

(School of Economics， Nanjing University， Nanjing 210093， China)

Abstract:Scarcity of endowment insurance channel in rural area is the main reason for the difficulty in promoting endowment insurance fund and in attracting farmers involved in the insurance system. On the other hand， farmers have difficulty in obtaining loans for farm their lives as well as for farm production due to the poor financial system. Endowment insurance fund would be a good means to solve this problem.

Key words:Rural endowment insurance fund; Micro credit; Value adding

Redesigning for the Matching System of China Credit Markets

YUAN Kai-hong1，WEN Sheng2

（1. Guanghua School of Management， Peking University， Beijing 100871， China;

Dalian Commodity Exchange， Dalian 116023， China; 2. Research Dept.， Unionlife， Beijing 100020， China)

Abstract:The banking credit market in China is characterized by dual structure， i.e. the target and the non-target credit markets. These two markets have different operation mechanism. The negotiation process of target credit market is characterized by a deferred acceptance procedure with stability. However， no such a stabilizing matching procedure exists in the non-target market. We thus recommend replacing the decentralized negotiation process with centralized matching procedure through measures such as bank credit program disposure and centralized matching clearing house in order to decrease transaction cost for small and medium sized firms.

Key words:Two-sided matching theory; Credit markets; Matching

Toward the Securitization of Intellectual Property in China

DONG Tao

( School ofCivil and Economic Law， China University of Polotical Science and Law， Beijing 100088，China)

Abstract: The securitization of assets has become a basic tool for raising capital in the financial market. Securitization technology allows its application in intellectual property. As intellectual property grows as the most important corporate asset， it represents a vast potential market for securitization. Presently China is experiencing a fundamental change of economic mode and trying to take a road of sustainable development. The introduction of intellectual property securitization surely can be a useful financial tool to boost the commercialization of intellectual property.

Key words:Intellectual property; Intellectual property system; Securitization

An Investigation on the Relationship between Energy Consumption and the Trade of Energy Intensive Goods in China

LI Kun-wang， SUN Wei

(Department of International Economics and Trade， Nankai University， Tianjin 300071， China)

Abstract: This paper attempts to analyze the empirical relationship between energy consumption and the trade of energy intensive goods in China.Monthly data through 1997-2007 are analyzed with VEC model. The empirical evidence suggests that from 1997 to 2000， bi-directional causalities exist between energy consumption and net imports of energy intensive goods， while from 2001 to 2007 bi-directional causalities exist between energy consumption and exports of energy intensive goods.This results indicate that trade structure of energy intensive goods strongly depends on energy input， and that the demand of energy intensive goods from other countries may be an important factor accelerating China energy consumption in recent years.

Key words: Energy intensive goods; VEC; Granger causality

Duple Agency Costs and Effectiveness of Debt Governance Mechanisms: Evidence from Listed Companies in China (1998-2006)

MA Jun-lu， ZHOU Jun， LI Ze-guang

(Department of Finance， Nankai University， Tianjin 300071， China)

Abstract: This paper discusses the feature facts of debt governance in China listed companies in transition based on classical perspective. To understand debt governance of China listed companies we need to pay attention to the issue of duple agency cost. The empirical study finds that constraints put by debt to agency cost I are not significant for state-owned enterprises， even as debt provides cash flows to support the serving consumption for managers. Debt can reduce agency cost II to some extent. Debt plays a positive role on the optimization of corporate governance in China listed companies in recent years. At the same time， debt governance mechanisms are constantly optimizing the company’s value and play a positive role in the dynamic evolution for China listed companies.

Key words: Duple agency cost; Debt contract; Heterogeneity; Panel data; Dynamic evolution

Relations Management for Governance Environment， Ownership Structure and Investors

MA Lian-fu， CHEN De-qiu， HU Yan

(Research Centre for Corporate Governance/Business School， Nankai University， Tianjin 300071， China)

Abstract: This paper researches investor relations management for listed companies in 2005 in China and examines the impact of governance environment and ownership structure on investor relations management in Chinese securities market. We find that the better the governance environment is， the higher level of investor relations management for listed companies; that ownership concentration and the level of investor relations management are significantly negatively correlated，the second largest to the fifth largest shareholders have limited power to other shareholders and play limited role to investor relations management; that lower level of investor relations management exists for government-controlled listed companies; that the governance environment has complementary effect on the adjustment process to the shareholding structure， it can reduce the negative relations between equity concentration and investor relations; that the impact of governance environment on investor relations for the listed companies with different ultimate controllers is mixed.

Key words: Investor relations management; Governance environment; Ownership structure; Moderating Effect

What does the Scientism of Economics Implicate?—the Double Nature of Economics and Its Research Thought

ZHU Fu-qiang

(Lingnan College， Sun Yat-Sen University， Guangzhou 510275， China)

Abstract: The research object of economics involves two broad fields: the nature and the human world. As a result， economics has double natures: humanity and scientism， which is embodied on the two corresponding phases of economics research. Regardless of the differences in the nature of economics， economics itself can not be directly embraced in natural sciences. This is because economics differs from natural sciences in connotation， research objectives and methodology. Economics theories tend to be controvertible， subjective and normative. Thus， the aim of scientism is not the natural science represented by physics though economics tends to be more scientific.

Key words: Scientism; Humanity; Methodology

Status Quo and Countermeasures for Shaanxi Technology Innovation

CHEN Jiu-long

(School of Humanities and Social Sciences， Xi’an Jiaotong University， Xi’an 710049， China)

Abstract: Firms represent the entities of technology innovation while technology innovation serves as the development engine for modern social and economic development. We examine 62 enterprises in Xi’an， Xianyang and Baoji in Shaanxi Province and analyze the status quo of innovation in the province. Then we put forward problems of it and propose countermeasures in order to contribute to Shaanxi technology and economic development.

Key words: Technology innovation; Status quo; Problem; Countermeasure