Table of Content

16 May 2014, Volume 34 Issue 5

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RECONSTRUCTION OF MACROCONTROL
SYSTEM UNDER CHINA'S REFORM

FANG Fu-Qian

2014, 34(5):  5-21. 

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China's macrocontrol has been established in the belief basis of “controllability”.Macrocontrol target is double: the first goal is to reform, development and stability, and the second goal is to promote economic growth, increase employment, price stability and maintain the balance of international payments. The second goal should obey and serve the first goal.The concept of “controllability”is incompatible with the requirements to let markets play a“decisive”role in allocating resources. The government controls on the policy instruments and related economic parameters are constantly diminishing since the reform and opening up.The multiplicity of macrocontrol targets often results in the goal conflict, changing, regulatory lag and results imbalance, leading to difficult to achieve policy objectives and economic instability. Reconstruction of macrocontrol includes the reconstruction of macrocontrol concepts, macrocontrol goals and macrocontrol frame. The current target of macrocontrol is to solve the excess capacity,structural imbalances and increasing employment, and to manage the demand and supply equally.

THE INTERNATIONALIZATION OF RENMINBI:
DEVELOPMENT, PROSPECTS AND ORIENTATION

ZHEN Feng

2014, 34(5):  22-31. 

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In the background of global economic crisis and fast growing of China, this paper built a route of the internationalization of Renminbi on the monetary function. The empirical models suggested that the flowing and stock of Renminbi in official reserve, international settlement and international debt securities market would grow fast. However, it was difficult to shake the position of US dollar. Under the broad prospects, the internationalization of Renminbi could be promoted in three areas. The first was to improve the reform of economic and financial system, build a positive interaction between the reform and internationalization. The second was to improve the involvement of Renminbi in both international market and international governance. The third was to build the linkage between onshore and offshore market by enlarge the crossborder tunnels and develop Hong Kong offshore market.

WHETHER THE GIFFEN BEHAVIOR EXISTS IN FAMILY SERVICE OR NOT
——Evidence from a Consumer Survey in Beijing

WANG Zhi-Gang, ZHOU Yong-Gang, QIAN Cheng-Ji, WANG Zhi-Bin

2014, 34(5):  32-43. 

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Giffen goods which originated from the British economist Robert Giffens special understanding of Irish potato market rule, embodies in the positive relationship between commodity price and its sales volume.At present, the academic circle breaks through the above understanding of Giffen goods, some scholars use Giffen behavior to replace it.So far, the exploration on Giffen behavior never ceases in academic circle, the key lies in the lack of evidence of the existence in reality. Therefore, based on the perspective of generalized virtual economy, this paper explores the existence of Giffen behavior for the first time by surveying urban consumers behavior of family service employment of consumers in Beijing. It turns out that, when the extra work time ratio locates in 01~03, consumers will increase employment as the wages of family service workers rise, which verifies the existence of Giffen behavior. Furthermore, in order to avoid the“Giffen Trap”existing in industry of family service, this paper proposes some suggestions.

WHAT ENABLES TECHNOLOGICAL SELFRELIANCE ——Historical Experiences in Complex Product Industries in China

SUN Xi

2014, 34(5):  44-57. 

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Huge divergence of competitiveness among different sectors is an important feature of industrial development in the past three decades in China. A reasonable explanation of this divergence is crucial to effective industrial and technology policies. This study firstly defines technological selfreliance as a special technological learning which is opposite to technological dependence, then analyzes those key features which change technological dependence to selfreliance based on a comparative case study from three complex product industries in China. Those features are linked with the evolution of embedded demand and accumulation of national technological capability. Interactions of these two sides determine the fate of both imported technology and indigenous innovation. The economical bankruptcy or technical failure of imported ones would diffuse indigenous innovations, where local breakthroughs amplify to a broader competitiveness. This paper also gives policy suggestions on government positioning, technology strategy, demand policy and international cooperation.

THE INDIRECT EFFECT EVALUATION OF FOOD SAFETY REGULATION 
——An Example of Diary Safety Regulation

ZHANG Zhao-Zhong-1, ZHANG Hong-Feng-2

2014, 34(5):  58-68. 

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Food safety is related to consumers life and health. It is urgently needed to strengthen food safety regulation. The premise to resolve the food safety problem is to test the implementation effect of regulation. This paper empirically analyses the effect of food safety regulation on diary product consumption, the nutritional level and the health condition of consumers in China. The results show that: the consumer has restored the confidence on diary product. The food safety regulation has improved the growth of diary product consumption, and it also ameliorated the nutritional level and the health status of consumers. But in general, the promotion is not so significant and ideal. This conclusion has guidance meaning to enhance the reform of food safety regulation in China, and we suggest construct a multisubject cooperative governance frame.

CAPITAL REQUIREMENT,“TOO MANY TO FAIL”
BAILOUT AND SYSTEMIC RISK

YANG Liu-Yong, ZHOU Qiang

2014, 34(5):  69-79. 

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Systemic risk is defined as the correlation of returns on assets held by banks in this paper. Based on a theoretical model, this paper analyzes the relationship between capital requirement and banking systemic risk in the presence of “toomanytofail” bailout. Then this paper makes an empirical test using an unbalanced panel data from 2006 to 2012 of 11 different countries and regions listed commercial banks. The results show that, under certain circumstance,“toomanytofail”bailout is the regulators optimal choice. However, in the presence of this expost optimal policy, an increased capital requirement may induce more systemic risk by affecting banks exante investment decisions. This effect is more significant in counties with low level of financial freedom. Chinas capital regulation reform should coordinate closely with financial marketization reform.

THE IMPACT OF BANK ACTIVITY AND
FUNDING STRATEGIES ON RISK AND RETURNS
——Empirical Evidence from Commercial Banks in China

CHEN Wen-Zhe

2014, 34(5):  80-96. 

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The 2008 financial crisis has important implications for the feasibility of different banking models. Using the panel data of 97 Chinese commercial banks from 2005 to 2012, this paper comprehensively takes both bank activity and funding strategies into account, and examines their impact on bank risk and return. This paper finds that due to the excessive reliance on depository funding and lack of motivation to develop noninterest business, expansion into noninterest incomegenerating activities and nondepository finance cant improve the bank profit and diversify risk obviously, which is very different from the experience of developed countries. This conclusion can provide some basis and suggestions for banking sectors reformation in the future.

THE MARKET STRUCTURE OF CHINESE IMPORTS AND
THE INTERDEPENDENCY BETWEEN CHINA AND TRADING PARTNERS

WEI Hao, GUO Ye, LI Chong

2014, 34(5):  97-112. 

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Based on 230 manufactured products, this paper measures the market structure of Chinese imports, and provides the comparative analysis of the interdependency among China and its 19 main trading partners. The results show that the share of lowtechnology and lowmiddletechnology manufactured goods in Chinese imports declines between 1995 and 2011, but the share of the hightechnology manufactured goods increases to the largest share before 2000. The export dependence of the developing countries on China is larger than the import dependence of China on other countries. China is the main export country of the developing countries. The interdependence degree between China and countries in Asia dominates the interdependence degree between China and the developed countries.