Table of Content

16 June 2012, Volume 32 Issue 6

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WHAT DETERMINES THE HIGH PROFITABILITY OF
CHINESE COMMERCIAL BANK

HUANG Juan, ZHANG Chun-Lin

2012, 31(6):  5-14. 

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This paper discussed the reasons of high profitability of Chinese commercial banks from two perspectives: individual level and provincial level. The sustaining economic growth continued to improve household incomes and increase the demand for banking products and services. The strict control on interest rates and informal finance from government set commercial banks in the position of monopoly, which were the most important reasons for the high profitability of commercial banks in China. Although the degree of marketization of banking industry had increased dramatically since the banking reform started in 2003, Chinese commercial banks still could not operate independently as real enterprises. The banks increasing profit was a result of the macro economy and the policy environment, which caused so many criticisms on Chinese commercial banks.

CHINA'S TURNING POINTS OF BUSINESS CYCLES ON STR MODEL

YU Yu-Xin-1, XIE Hong-Fei-2

2012, 31(6):  15-22. 

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Based on smooth transition regression model, this paper studied systematically the identification of the turning point of Chinas business cycles. The empirical results showed that the regime switching of GDP took place in lagged one period, the growth rate of middle value of expansion and depression was 9.6%; the regime switching of the fixed investments took place in lagged four periods, the growth rate of middle value of expansion and depression was 19%; the fixed investments could promote economic slowly, and the transition location of GDP took place in lagged two periods of the fixed investments.

ON INTERACTION MECHANISM OF
AGRICULTURAL PRODUCT PRICE AND INFLATION

DU Liang-Sheng, ZHOU Bin, DUAN Peng-Fei

2012, 31(6):  23-33. 

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This paper analyzed their interaction mechanism in the perspective of labor costs, real interest rates and exchange rates. Through farmers grainsaving behavior, firm investment promotion, exchange rate transmission mechanism, inflation had an effect on agricultural product price level. Under the conditions of the Lewis turning point, the rising agricultural product price level led to the general price level going up through the channel of rising labor cost, and the influence degree grew continuously. To test the above hypotheses, the paper applied an empirical research with VAR models. Finally, the paper provided a series of policy implications on inflation management in macrocontrol system.

THE ASYMMETRY AND RIGIDITY OF AGRICULTURAL
PRODUCT PRICE IN CHINA——Microinterpretation Based on Spatial Competition Model and Menu Cost Theory

LI Zhi-1, CUI Xiao-Ning-2

2012, 31(6):  34-43. 

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The price of agricultural products experienced a several rounds of the substantial rise and fall in Chinese market since 2007. However, the retail price presented unsymmetrical and rigid trend, which different from the wholesale price. The uprising of the retail price greatly affected the result of price control policy. This paper introduced microeconomics, basic management theory and analytical model to explain above phenomena. This paper also provided a new perspective for the government to adjust the current price control method and to innovate the price control system in the future.

RESEARCH ON THE CHINESE POTENTIAL
GDP GROWTH RATE
——Based on the Comparison of Japan, Korea, and BRIC Countries

CHEN Liang, CHEN Xia, WU Hui

2012, 31(6):  44-55. 

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Under the background of international financial crisis, the imbalanced, uncoordinated and unsustainable structural contradictions of Chinese economy were becoming serious increasingly. Especially in 2012, the Chinese government set the expected GDP target below 8%, which was the lowest one in the past 8 years, and had triggered hot discussion on Chinas economic development path and the development potential in the future. The answers of these problems relied on the scientific analysis of the comparison between the typical developing countries. This paper selected the typical economic entities such as Japan, Korea, which had already passed the middle-income trap successfully and part of BRIC countries such as Brazil, India, and Russia, as the comparison objects and applied these entities potential GDP historical data based on the HP filter. Based on the deeply analysis of the fluctuation of potential GDP rates on different development stages and the corresponding features of the industry structures, input structures and demand structures, this paper provided some opinions for Chinas sustainable development and the fundamental transformation of growth mode.

INTERGOVERNMENTAL FISCAL TRANSFER，INCENTIVE
EFFECTS AND LOCAL TAXATION STRUCTURE

JIA Jun-Xue-1, GAO Li-2, QIN Cong-1

2012, 31(6):  56-63. 

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This paper investigated the incentive effect of fiscal transfer on local taxation based on Chinese countylevel data during 19972005. The empirical analysis suggested that fiscal transfer could not promote the growth of local governments tax revenues owing to the lack of incentive mechanism in the intergovernmental fiscal transfer, which were more obvious in the eastern region and since the income taxation share reform. The earmarked subsidies had significantly positive effects on local tax revenues in particular VAT and business tax revenues, while tax rebate subsidies and other transfer have negative effects on local tax revenues.

MEASUREMENT AND EVALUATION ON CHINAS INTERGOVERNMENTAL
TRANSFER PAYMENT SYSTEM EQUALIZATION EFFECT
——Based on Multidimensional Perspective of the Horizontal Fiscal Imbalances

ZHAO Gui-Zhi-1, KOU Tie-Jun-2

2012, 31(6):  64-70. 

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This paper focused on regulated effects of Chinas horizontal fiscal imbalance. Based on provincial fiscal revenue and expenditure data, the central government transfer payments as well as various regional population data, this paper applied the Theil entropy index model to analyze the fiscal equalization effects of Chinas current transfer payments system. The empirical results showed that the horizontal imbalance fiscal regulation of central fiscal transfer payment presented multiple and complex features. Thus, this paper provided some policy proposals to orientation promotion, strategy adjustment and system innovation regarding intergovernmental transfer payment system equalization.

VALUE-ADDED OR TUNNELING——A Study on Controlling Shareholders in the Equity Private Placement

XU Rong, LIU Yang

2012, 31(6):  71-82. 

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Theoretically, controlling shareholders would choose either tunneling or propping when participating in the equity private placements. This research explored that market reaction around the announcement date was positively related to the ratio of controlling shareholders acquired, which was the result of asset transfer rather than increasing equity shares in cash. Further study provided empirical evidence that it was efficiencyimproved when controlling shareholders took part in the equity private placement by analyzing the one year rate of return and performance of the listed companies after the equity private placement. This research supported the hypothesis that business groups could facilitate internal resource allocation through asset reorganization and also gave new explanation to the announcement effect and the price discount of private placements.

ULTIMATE CONTROL RIGHT, BLOCKHOLDERS COUNTERBALANCE
AND QUALITY OF INFORMATION DISCLOSURE

TANG Yue-Jun-1, ZUO Jing-Jing-2

2012, 31(6):  83-95. 

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From the perspectives of type II agency problem and protection of specialized assets and based on the theory of ultimate control rights, this paper discussed the impacts of counterbalance mechanism of blockholders between controlling shareholders and other blockholders on information disclosure strategy and quality of Chinese listed companies. The empirical analysis indicated as following: (1) controlling shareholders with higher control rights were inclined to disclose apparently reliable and timely information to delude the market and small investors, but had less motivation to improve the relevancy of information disclosure; (2) controlling shareholders with higher cash flow rights or involvement of specialized assets most probably manipulated information disclosure in order to enhance its reliability and timeliness, but had less motivation to improve its relevancy; (3) other blockholders were inclined to counteract information manipulation by controlling shareholders, resulting in “negative impacts” on the reliability and timeliness of information disclosure; (4) it was significant Ushape between counterbalance degree of other blockholders and reliability and timeliness of information disclosure.

THE PROMOTION EFFECT OF INDUSTRIAL LEVEL ON REGIONAL INITIAL DISTRIBUTION WELFARE IN CHINA——An Empirical Analysis Based on the Provincial Panel Data

DING Zi-Nan-1, MU Huai-Zhong-2

2012, 31(6):  96-105. 

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With the provincial panel data during 1993—2009, this paper studied the effect of industrial level on the regional initial distribution welfare, through constructing regional welfare and industrial level coefficients. Empirical results showed that the industry level was correlated positively with the regional welfare coefficient. An industry at a higher level accompanied with a higher level of industry welfare. Industrial level had the promotion effect on regional initial distribution welfare. The growth rates of industrial level and regional welfare coefficients followed a Ushaped curve, which represented the periodic characteristics of regional economic development. The further promotion of the industrial level would improve the initial distribution welfare level significantly in the western and central region. The welfare effect of the modern service industry structure would be significant in the eastern and northeastern region.

DEBATE ON THE LEWIS TURNING POINT OF CHINA：
A REVIEW OF THEORY AND EMPIRICAL STUDY

WANG Yu

2012, 31(6):  106-112. 

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The phenomenon of migrant worker shortage and labor wage growth in recent years had brought about a bitter controversy over the argument whether China had reached the Lewis turning point. The controversy of the Lewis turning point of China could be classified into four major categories, based on different standards and basis for judgment as well as various statistics. However, the fundamental contradiction between the labor wage growth and a high proportion of population of rural surplus labors could not deduced from the Lewis model. This paper provided a theory of serious segmentation in Chinas labor market and institutional barriers for labor mobility, which ignored by the Lewis model. Therefore, the classical Lewis theory would not be a suitable theory applied in Chinas labor market, which need to take institutional barriers and the urbanrural division into consideration.