This article will discuss the characteristics of the financial system in China. The role of China’s financial system in helping firms will also be explored, and potential aspects of future development will be explored. The main motivation here is a deep understanding of the functioning of the Chinese financial system, as well as the regulatory environment in which it works or works, in particular in the financial sectors and the institution of the economy. In relation to the banking sector, this might include how the banking system, various bank types, important users (savings and loan owners) operate, and the country’s role if there are restrictions on ownership. Central Bank. In fact, financial markets and banking systems in China have a very broad problem and will be different from those in developing, developing transit, and developing countries. The focus will be on creating a detailed description of contracts and activities where financial institutions, including investors, companies, and the government will play the role of an intermediary as intermediary for users and for ongoing contracts and activities.
China’s unforeseen approach to the market economy during transit is widely distributed among researchers. Although Western literature cannot be applied directly to Chinese economic conditions, it is an important theoretical basis to understand the different types of behaviors of firms and banks in China. In the first part, we use a unique set of financial information data from more than 6,000 companies and we will study a bank loan model in China at a strong level. As well as common factors, such as profitability, size and credit history, we see that state ownership is strongly related to the loan decision; Evidence is consistent with a soft budget restriction.
The second division gives us a discussion on whether this is a tendency on loans as a result of the supply side (bank). By focusing on investing in cash flow sensitivity, we use financial and accounting data for more than 1,700 companies listed in China when we study company investment behavior in different jurisdictions. We compared the adverse effects of cash flow for businesses in the case of different forms of ownership of the sample with a higher investment sensitivity of private owners’ cash flows. This result will allow us to determine the lending trend in China and the cause of the soft budget restriction as a procurement effect. At the same time, we also found that this sensitivity does not belong to Tobin, who expresses us as a positive correlation with size and tight age, but we have market knowledge of companies in China.
Institutional development is seen to increase market efficiency as the basis of economic reform in countries with cross-border economies. Since companies in the private sector tend to be better than their public counterparts (see Estrin et al., 2009), we study the influence of regional institutions on the overall factor productivity (TFP) of different-owned businesses Chinese. We see that the quality of the institutions is strongly interrelated with TFP businesses, and efforts to improve institutions to promote business operations are crucial for companies to achieve higher productivity and sustainable growth. The results also show that there is a need for urgent reform in the public sector in China.
Any evaluation of the Chinese financial and expectations system should focus on China’s economic growth and its contribution to a range of domestic economic goals. The evolution of the Chinese financial system in all its different elements in the middle of the stream, with a simultaneous change of market and non-market orientation. The hybrid nature of the foreign observers is relatively unfavorable but ineffective, and indeed, China seems to have a reasonably good demand at present. Continuing the reform, non-market demands, turning to the component negligence and improving policies, while at the same time the components based on the immature market, a country with a per capita GDP, human resources and institutional weaknesses He has tried to overcome serious obstacles. 2000 dollars.
China has some domestic economic problems that are directly related to rapid growth and market system reforms. The major problems are: (1) eliminating China’s workforce from low-income home-based, (2) accelerating the construction of urban infrastructures, and (3) opposition against the tax base in China and other state financial resources. China is trying to move to the country’s status with an average level of income in a couple of years, starting with a very low per capita GDP. Economic, social and political grounds are changing and expanding.
For this reason, the basis of China’s economic and financial policies is the need to continue to support economic growth and job creation, which modernizes its financial system. In this environment, it is worth distinguishing the two-part structure of the Chinese financial system as a competitive, market-based, and public-oriented government component. The Chinese market financial system was not practically available in 1978, at the beginning of the reform period after Mao. While most of the traditional institutional forms of modern financial systems are not immature today in the operation of the institutions, the role of other non-traditional financial institutions, in particular, the Chinese planning committee, is particularly strong. The system’s dynamics of the system in 1978 were relatively fast, and the changes continued dramatically. This week in Beijing, China’s Chief Executive Officer was in charge of the first meeting of five-year meeting to determine the strategies for the next phase of Chinese financial reform. When China launched “Restoration and opening into the outside world, at the end of 1978,” the economy of China was not controlled by monetary factors. Instead, all goods and services were allocated to the plans, values, directions, and coupons of the ration, including all work resources, investments, relevant resources, and the distribution of final products. However, money is still necessary. State budgets were prepared and reviewed, and vulnerabilities were eliminated. The link between physical and administrative flows is administered to balance actual and monetary balances.
ORGANISATION AND STRUCTURE OF THE CHINESE FINANCIAL MARKETS
The largest banking system of China’s largest banking sector is quite ineffective. About the rapid reform of China’s financial system, there has been a severe decline in the ordinary level of the number of loans after that among large banks. A crucial task is to the success of any reform. Despite the rapid growth of market stocks in China, the role of resource allocation is ineffective and limited in the economy. The development of China’s finances is the most important development in the long term. Regarding sustainable and stable economic growth, China should try to stop or prevent any devastating financial crisis, bank banking, the “double crisis” in the foreign exchange market and the banking sector, the stock exchange, or random situation with real estate. Economic reform, which lasts over the past 30 years, has continued to increase the role of independent financial activity.
Initially, in the 1980s, social community committees are divided into rural areas on family farms. Individual managers mainly engaged with state-owned enterprises to ensure profitability. The bankruptcy had a legal opportunity. Since the system reform has diverted many offenses, adjusting prices to the deficit, and increasing the demand for products such as cotton and vegetable sweets. The Chinese Monobank came into the central bank and is well-known among four banks. Other banking institutions and activities, including trust and investment companies, local investment banks, finance companies, rural and urban credit institutions, savings clubs, and private banks were even experimental. Including credit instruments on a wide range of informal commitments for bank loans, treasury bills, corporate treasury bills, and local authority payments, and their various projects fell. Ten years ended with financial turmoil in Tiananmen in 1989 and led to social rehabilitation.
The second phase of the economic and financial reform of the 1990s has speeded the pace of change. Food price coupons price reforms, but inflation rates were high from 1992-1995. The stock exchange was launched with local brokerage houses and investment banks in ten years, despite the fact that they had been manipulated by a heavy government. Corporate governance initiatives have developed more modern forms, including joint stocks and board members. Some government bonds started trading in the secondary markets. Internal control of large commercial banks has greatly increased as part of efforts to regulate inflation. In the mid-1990s, China created three political banks for politics, banking, foreign trade, and domestic infrastructures. This has continued to be a major way of mitigating the lending burden on the government’s policy on commercial banks. Indeed, recognizing the fact that at the end of the 1990s and in 1980, bank loans have not begun government policy, instead of profitability, it is a few steps taken to recapitalize the four largest commercial banks by transferring them to the store, called bad debts. Company (AMC). Such transfers were also part of an aggressive corporate governance reform, which led to the closure, mass merger, and acquisition of 50 million workers in the period 1996-2005. Beyond the Asian financial crisis in 1997, due to short-term international capital flows, China is facing a much lower GDP growth and a decline in the consumption of rural households in the late 1990s, especially due to internal policy errors. Despite these common difficulties, in the late 1990s, Chinese economic and financial institutions were free from the dramatic changes that took ten years.
THE RELATIONSHIP BETWEEN THE FINANCIAL AND CORPORATE SECTORS OF THE CHINESE ECONOMY
Chinese financial markets have identified the definition and internal knowledge of the financial market sector and were not very successful in distributing resources effectively as a banking sector. Two of China’s major financial markets are at Exchange Stock Exchange (SHSE) and Shenzhen Stock Exchange (SZSE) which are growing at a huge pace. However, they did not work at a rate that could improve the Chinese financial market. All relate to deposits and weak regulation, describing the regulatory environment, especially in institutional and commercial law, and the institutions that are responsible for the poor legal development of investors and the enforcement of contracts.
The markets are poor and ineffective, as well fact that a large number of shares are owned by various government agencies (including bank state ownership) that are traded on the stock exchange. Significantly improve functioning of the financial market, this can be achieved through a planned reduction in state-owned economic enterprises and their slow sales over time. The shortage of qualified market professionals, such as bankers of investment, lawyers (business), and accountants. There is no incentive to encourage financial intermediaries actively and should act as institutional investors to make them the smooth and efficient operation of the market. In particular, they are not entirely used, as they play a role in enhancing market efficiency and strengthening the corporate governance of listed companies. All of these factors include market trading in a practical way the same as the same assets. As a result, all of these forces need to develop new products and markets.
Businesses are the best of the financial system of local authorities and investors in different forms of other funding channels, such as internal financing, trade credits, and alliances, as well as the total economy, other than the banking and market sector stock. “Many of these funding channels are based on alternative management mechanisms, such as competition, trust, reputation and relationships in commodity markets and inputs.” (Allen & Qian, 2005) The growth of the non-state “hybrid” sector, companies that do not have different proprietary structures, and funding methods. It should be remembered that the broader view of this definition of the Hybrid sector is also the definition of a private or private sector that is part of this industry. In particular, the companies associated with the rural Village (TVE) enterprises or local authorities, are part of the hybrid sector, especially because of the companies that are privately owned, although the share is owned by the local authorities. The Hybrid sector includes various non-public or non-public companies, and the sector is growing faster than the public sector, including SEE (SOEs), a central government-controlled enterprise, and certain sectors. Companies traded publicly are being established. Most of these companies are transformed into these sectors from the public sector and make a significant contribution to the country’s economic growth. These alternative routes and mechanisms can exist with banks and financial markets, so they must be encouraged, as they also improve the development of the hybrid sector.
In particular, private-owned private companies (but not the state and non-trading) include: investors (or corporations) from China, Taiwan, or Hong Kong, foreign investors (or companies), and may be joint ownership. Companies that are jointly owned by local authorities, communities, employees, and forged institutions (Che and Qian, 1998). In a country like China, where markets and institutions are undeveloped, the ownership of local government-owned ownership will be more effective than clearly defined state property or private property rights.
CHINA’S BANKING SECTOR
In the banking sector, the Chinese financial system is a shallow banking system, and the four largest government banks regulate the system due to large TGA (subsequent loans). These central banks, in particular bank optional and state-owned investment projects, will be over-sourced, using the money invested in their business from significant foreign exchange reserves, to be made available for optional lenders. In the Chinese banking sector, many privately operated operations, allowing more foreign and domestic banks to be attracted to the sector. This is an important prerequisite for economic growth, as it will raise more competitiveness and raise the following loans so that the banking industry can act.
CHINA’S EQUITY MARKET
Compared to the Chinese stock market and the gross domestic (OTI) stock between the cost and market value, sold in the gross domestic product of many other countries. The total transaction value that will be the best indicator of the market size than market capitalization as a non-trademarked market of market capital, measured at the total cost of market volatility measures or the share of total market capitalization, traded on the market. Markets. On the other hand, the Chinese banking system is much more appropriate in size than the stock market, the ratio of total bank credit to gross domestic product higher than the attitude of the German countries of origin. But when only accounted for the hybrid (or loans) loan provided by the Hybrid sector, China’s share fell to 0.24, indicating that most bank loans are given to companies in the state and lists. Also, the Chinese banking system is ineffective: The total value of total assets (0.12) is far higher than the average for the first highest group of originating countries from France (0.05).
THE FOREIGN EXCHANGE MARKET IN CHINA
The exchange rate policy on the yuan was transferred through three systems in 1949. Initially, in the period from 1949 to 1978, the central government collects and administers foreign exchange demand and supply (for companies, individuals, and government agencies). A “binary” exchange system is introduced, where there is an official exchange rate and a market exchange rate; The special currency “RMB Stock Exchange” was issued and mainly distributed among foreigners (foreign currency, which was a foreign currency in charge of China).
A greater market system was replaced instead of durability and the centralized planning system, which was still active in 1994. The exchange rate is set only in US dollars and can control a small range (approximately 1 US dollar = 8.88 yuan) through state monitoring The exchange rate policy on the yuan was transferred through three systems in 1949. Initially, in the period from 1949 to 1978, the central government collects and administers foreign exchange demand and supply (for companies, individuals, and government agencies). Secondly, between 1978 and 1994, a detection system between SEE levels at the provincial level was introduced; so that companies and state organizations that receive and require foreign currency (by import/export) have a right to defer a certain currency depending on their application. Export quotes are issued by the central government. A “binary” exchange system was introduced with the official exchange rate and market exchange rate; The “South African Currency Exchange” was a special currency, organized and disseminated mainly between the foreign currency (foreign currency to China).
DEVELOPMENTS AND PRACTICES IN CHINA’S MONETARY POLICY
The big thing is the Chinese financial system in the early 1990s, and the growth of the Chinese stock market. In 1990, the Shenzhen Stock Exchange (SZSE) and the Shanghai Stock Exchange (SHSE) were set up; then both sides of the institutions they have grown. However, the legal framework and institutions that support the stock market slow growth in the stock market winning. The first lawsuit and the legitimate Chinese adoption of bankruptcy in 1986 (power), but until the end of 1999, an officer in the company. This is the version of the press law requires, in that they went and negotiated with them, in the companies he committed is devoid of any exchange in the sub-navigation. Either the offices and branches of foreign companies, as well as the organizational structure, the production, and sale of securities, the accounting, the bankruptcy, and the acquisition merger (4 China is the oldest of the carrots of the Pacific companies of the insurance company in China operating in 1943. In 1943, the title and resuscitation insurance business in 1986.
From the financial system, the development of the early and late fourteenth century Chinese, and the particular officers of Shanghai, as in the Asian financial center.
At a time when the center of Shanghai will be transformed from a shopping mall to industrial, agricultural, and industrial areas of the international financial markets and convenience issues. Thanks to successful business and entrepreneurial activities, financial institutions have grown, and many financial innovations have increased. For example, the number of Chinese creditors (Qian Zhuang) exceeded 105 in 1875; The first five-day Chinese banks were between 1897 and 1908; In 1936, 28 years old, opened on the banks of the great river of Shanghai.
In China, revenues are used for 11 currency transactions. The stress emitted by some local banks has been observed in others the exchange rate of the volatile local currency; Many local banks, amid the concerns of top operations, mean capital reserve loan portfolios are often accepted.
At the same time, the fear and risk of the business insurance industry are shifting, introduced by the British. Real estate insurance, ships and have become popular goods. The main one is the guarantee to avoid dangers and fears; To reduce the problems foreign traders have worked with Chinese selectors (and sponsors) unfavorable to choosing Chinese traders. China and foreign traders, the Commission has developed a business system, the first credit negotiation, financial resources, allowing this means that the necessary institutions. Finally, the stock of Shanghai was the largest in Asia and especially in the 1920s and 1930s.
For the development of financial markets and the development of the bank decided to come across TGA’s largest banking system undeveloped. Of these loans). Permanent state private banks, most people are not released until the state institution of the film. In the state of the property (usually) debtor banks and borrowers (mainly state-owned companies) will choose heretic malice to choose a good way of incentives, with investment projects to choose from. Due to the number of new items that can be found in the state-owned banking network, the service is temporarily TGA per year in public banks.
The development of new products and new markets is also essential. TGA official data using those obtained from an available ICT is provided at the economic growth rate (and thus the state income tax) is not possible. Similarly, the place means to do more than it should be to encourage institutional financial investors and listed companies, who play a crucial role in improving the efficiency of the market and also to strengthen the governance of the business.
Another important reason is the problem for the Chinese would not be able to harm the financial and social stability of the financial crisis and the economy is. China is expected to be protected by the traditional financial crisis, including the build-up of the ongoing home and sector support sector crisis, due to a sudden drop in edge profits; nor the differences bubble on the real estate market stems from the deal to do with speculation. China can be protected from a new kind of financial crisis, the “double crisis” (simultaneous currency and bank/stock crisis), which is widely used in many Asian countries in the late 1990s. at the World Trade Organization of China (1992) offers free and technical foreign capital, but a blow and a large influx of foreign capital and speculation have significantly increased the likelihood of double discrimination. At present, the rapid growth of foreign exchange reserves, shows that the RMB is larger than the money in advance of the monetary revaluation of the Chinese currency compared to other major currencies in China. The central bank manages and controls how the revaluation process can be a monetary and conventional crisis.
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