Finance In China Research Articles

Construction and prediction of China's financial stress index based on the A-E-L coupling perspective

As economic globalisation and financial liberalisation continue to develop, domestic and international shocks have increased the pressure on China's financial system. To this end, this paper constructs the China Financial Stress Index (CFSI) to analyse China's financial situation. This paper selects 10 representative indicators of the banking, bond, foreign exchange, real estate and insurance markets for the period 2011from 2021. Based on the dimensionality reduction of the indicators, the paper uses the hierarchical analysis method (AHP) and the entropy weighting method (EWM) to assign weights, and couples them with the Lagrange multiplier method to obtain the China Financial Stress Index, and finally uses the long and short-term memory network model (LSTM) to forecast. The results show that the CFSI constructed in this paper can better portray the dynamic financial stress situation in China, and the overall financial stress in China can be divided into three trends.

New Actors in China–Brazil Financial Geography: Commercial Banks and Currency Exchange Against the “Resource-Seeking Consensus”

Chinese banks became major players in the global geography of finance. Yet studies of Chinese finance in Brazil focus on development (“policy”) bank loans, overlooking commercial banks. This inhibits theoretical advancements beyond the idea that Chinese finance in Latin America is largely “resource-seeking” in nature. Meanwhile, studies of the internationalization of the renminbi focus on state-led policy mechanisms in leading international financial centers, overlooking the expansion of renminbi exchange by commercial banks on the peripheries of global financial networks. I triangulate data from the Brazilian Central Bank, Chinese bank reports, and qualitative materials to present the first comprehensive account of Chinese commercial banking in Brazil. Although they are not yet major players, they are becoming important suppliers of trade finance and currency exchange services. I argue this reinforces challenges to the theory that Chinese finance in Brazil is primarily resource-seeking, and emphasizes that currency-exchange services play a central role in the internationalization strategies of Chinese finance on the peripheries of global financial networks.

The EU Accession Process, Chinese Finance and Rising Corruption in Western Balkan Stabilitocracies: Serbia and Montenegro

As front runners in the EU accession process, Serbia and Montenegro have failed to control corruption yet managed to advance along the path to EU integration. Although they have stronger state capacity compared to other Western Balkan countries, the two have recently reverted to previous poor governance practices after initial headway meeting EU good governance conditions. An in-depth analysis of the two countries explains this paradox as the result of the combination of the EU accession process and increasing Chinese finance. While the EU’s stability-oriented strategy helped to consolidate these authoritarian regimes, Chinese funding policies have further strengthened patronage networks, fuelling corruption in the EU’s ‘stabilitocracies’.

Impact of Digital Finance on Energy Efficiency in the Context of Green Sustainable Development

Limited by ecological conditions, in order to improve the innovation efficiency concerning energy, a change from “extensive” to “green” is required. The development of sustainable technology is the most important productive force. Economic development is centered on finance. Only by mutual penetration and interaction can China’s energy innovation be effectively promoted. “Green GDP (Gross Domestic Product)” is the main direction of China’s current economic development. A sustainable green digital economy is the primary condition for promoting energy efficiency, and it is the key to improving energy efficiency in China to achieve a green transition. Green finance for sustainable development refers to economic finance centered on energy conservation, environmental protection and technological innovation. Attention is constantly paid to the financial industry in China, and we are trying to combine the concept of environmental protection with financial development to promote the continuous development of China’s environmental protection economy. A company’s economic and environmental benefits will be improved from the point of view of improving resource conservation and reducing the environmental impact of equipment and processes. To achieve this goal, the “efficiency effect” of the financial system needs to be fully exploited to maximize energy efficiency. An empirical study about the relationship of financial performance and energy efficiency in the green sector is carried out while considering the environmental constraints. The results show that the expansion of the financial scale and the adjustment of the financial structure have increased the energy utilization efficiency by more than 15% from the past to the present and reduced the pollution of the ecological environment by more than 10% nationwide, realizing the effective allocation of resources. Digital finance is a new generation of financial services that combines the Internet and information technology with traditional financial service formats. Including Internet payment, mobile payment, online banking, financial service outsourcing and online loans, online insurance, online funds and other financial services. Therefore, the sustainable development of all aspects of finance has a huge catalytic effect on the doubling of energy utilization efficiency.

Using the gravitational mixed models to analyze the impact of China's foreign direct investment along with The Belt and Road countries on trade flows.

Since the “The Belt and Road” initiative was put forward in 2013, China's foreign investment growth rate has been greatly accelerated. In The Belt and Road context, many scholars used models to analyze the relationship between foreign direct investment, trade flows, and import and export trade. From literature reviews, it is found that previous scholars do not conform to reality and cannot be studied dynamically. Therefore, this study used the panel data of China's foreign direct investment and import and export trade in 40 countries along “The Belt and Road” from 2010 to 2019 to focuses on the impact of foreign direct investment (FDI) on trade flows, import trade and export trade. Regression analysis was carried out with the trade gravity model and Tinbergen's trade gravity model. In addition to model variables and arguments, the following control variables were adopted: exchange rate, natural resource rents, labor force population, differences in consumer ability, trade openness, and trade agreement signing. The results found that: (1) Foreign direct investment has a positive correlation with trade flow and import and export trade. (2) The labor force population has a negative correlation with trade flow, and import and export trade. (3) The expansion of China's economic scale can increase the scale of China's import and export trade, at the same time, the gap in consumption levels between the two countries will restrict the degree of import and export trade. (4) The possession of natural resources can also promote the development of trade.

Measurement and Forecasting of China's Financial Stress Index in the A-E-G Coupling Perspective

After the outbreak of the global financial crisis in 2008, many scholars began to quantify financial risks and find alternative variables to reflect financial risks better. The financial stress index is a good alternative. In this paper, nine important factors of economic aggregate, economic benefit, and economic structure are selected to construct China's Financial Stress Index (CFSI). Then, the coupling identification of AHP and entropy weight method (A-E) is carried out, and the CFSI and its fluctuation are predicted by the grey dynamic prediction model GM(1, N). The results show that the CFSI constructed by a-E coupling weight can measure the pressure of China's financial system more accurately, and the CFSI is predicted to show A gentle decline trend from 2022 to 2024. Inspired by previous studies by scholars, this paper tries to construct and predict CFSI from the perspective of A-E-G coupling, combining subjective and objective, and hoping to open new ideas on CFSI construction and prediction.

Regional Niche and Spatial Distribution of Foreign Investment in China from 2012 to 2021

Strategic positioning is the core issue of strategic management, and regional niche is the core of strategic positioning. Regional niche has important implications in sustainability transition. In this study, the regional niche and spatial distribution of foreign investment in 31 provinces of China from 2012 to 2021 are explored regarding sustainability transition. The results show that: (1) Low fierce competition is important for foreign-investment resources in sustainability transition in general. (2) The gradient of niche-evolution momentum is considerable in sustainability transformation. (3) The spatial echelon distribution of foreign investment is obvious in sustainability transition with a positive spatial-geography correlation. Therefore, in view of the overall space–time development and political layout of foreign investment in emerging industrialized countries such as China in the future, this study has important practical significance. It proposes countermeasures for policy-makers and managers to promote the expansion, evolution, and coordination of foreign investment in regional resources. The conclusion is helpful for China and other emerging industrial countries to successfully realize the space–time layout of regional niche, through foreign investment, and improve their open capabilities of global sustainable development.

The Coupling and Coordinated Development of Green Builds and Financial Development in China.

As a labor-intensive industry with a strong industrial driving force and high-technology integration, green buildings offer some comparative advantages. Driven by the concept of green development, green buildings are ushering in a period of opportunity for integrated development among multiple fields. Therefore, this research will select the panel data of the financial industry and the green buildings industry in 2014 and 2018, respectively, in 31 provinces in China (excluding Hong Kong, Macao and Taiwan) and, through the method of factor analysis, will innovatively construct a financial industry development index and a green building Development Index for each province in China. Through the coupling coordination model, it studies the development level of the financial industry and green buildings in various provinces, in order to deeply explore the path and mechanism of coordinated development between the two. The results show that the financial industry and green buildings in the eastern coastal areas have a high level of coupling, and the coupling and coordinated development have a greater degree of correlation. The potential for coupling and coordination in Central China is developing for the better, while volatility in the Northeast and Northwest regions is relatively large. From the time dimension angle, the degree of coupling and coordination between green buildings and the financial industry in China is generally low, and in the transitional stage, from the brink of unbalanced development to a primary stage of coordinated development. Accordingly, this paper proposes that local government should pay attention to the coordination relationship between green buildings and financial industry development and formulate a coordination mechanism between their growth according to local conditions, so as to promote the correct interactive advancement of the two.

The role of digital finance in reducing agricultural carbon emissions: evidence from China's provincial panel data.

As a vast agricultural country that emits a high level of agricultural carbon, China faces significant pressure to reduce its agricultural emissions. In recent years, digital finance has become a crucial part of China's financial system and has reshaped China's mode of green finance. Based on the 2011 to 2020 panel data of 31 provinces in China, this study discusses the effect and mechanisms of digital finance on agricultural carbon emissions. A two-way fixed effect model, threshold effect model, mediating effect model, and moderating effect model have been adopted to investigate the nexus of digital finance and agricultural carbon emissions. The results show that: (1) digital finance can reduce agricultural carbon emissions, and this effect is nonlinear, with two thresholds. (2) A reduction of agricultural carbon emissions through digital finance can be realized via digital finance's impact on farmers' entrepreneurship and agricultural technology innovation. (3) Urbanization has a positive moderating effect on digital finance's agricultural carbon emissions reduction effect. Based on the above conclusions, specific recommendations are proposed with regard to digital finance reducing agricultural carbon emissions.

Changing Realities: China-Africa Infrastructure Development

Changing Realities:China-Africa Infrastructure Development Mandira Bagwandeen (bio) Through an extensive portfolio of infrastructure investments, China has played a crucial role in helping Africa reduce deficits in its infrastructure. Over the past decade and a half, Chinese state-owned or state-aligned construction and engineering companies have strategically entered African markets with assistance from the Chinese government. Under China's Belt and Road Initiative (BRI), Chinese companies took on mega-infrastructure projects, especially in the energy and transport sectors, that could aid African countries with achieving higher levels of development. However, these mega-BRI projects came with hefty price tags that have contributed to compounding the debt stress of several African nations. In this regard, many international (and especially Western) actors have accused China of predatory lending practices and debt-trap diplomacy. This narrative has been further amplified amid the Covid-19 pandemic, which has had significant ramifications for BRI projects in Africa and around the world. The pandemic has created some doubt about whether Chinese-funded and–built infrastructure projects can be completed and, more importantly, whether African states have the fiscal capacity to repay these development loans. With reduced revenues available to African governments, the risk of defaulting on loan repayments is high. Moreover, because of the burden of loan repayments, African states are handicapped in their response measures to Covid-19 and its economic consequences. The Eighth Forum on China-Africa Cooperation (FOCAC) in November 2021 demonstrated that due to changing realities—including China's domestic economic concerns, U.S.-China trade tensions, the global economic impact of Covid-19, and Africa's pandemic-induced debt stress—Beijing seems to have realized that it cannot continue to be Africa's go-to bank for financing infrastructure development. This essay outlines that China may not be as willing as it was in past years to finance infrastructure development projects in Africa. It explores the impact of Covid-19 on the development of BRI infrastructure projects in Africa and briefly assesses the validity of the debt-trap and predatory lending accusations leveled against China. Additionally, the essay addresses [End Page 18] the Eighth FOCAC summit, which indicated that China is likely to reduce its focus on development financing for hard infrastructure in its cooperation with African countries. China's Belt and Road Infrastructure in Africa and Covid-19 As of 2019, China was the single-largest source of finance for African infrastructure, having "finance[d] one in five projects and construct[ed] one in three."1 Although the continent's enormous infrastructural investment gap cannot solely be met by Chinese financing, Beijing's role in contributing to the development of the region's infrastructure has been crucial. The China-Africa infrastructure partnership was strengthened under the impetus of BRI, which was introduced in 2013. The initiative closely centers on the Chinese proverb that "if you want to get rich, build a road first" and the argument that "infrastructure investments presuppose economic growth and enhance quality of life."2 This logic is particularly appealing to African states that are desperate to reduce their deficits in infrastructure. Several African scholars have opined that BRI could play a critical role in Africa's industrialization and infrastructure development through the building of synergies between Agenda 2063, the pan-African development plan of the African Union (AU), and BRI.3 Even individual African leaders and the AU welcomed China's infrastructural drive on the continent motivated by BRI. In January 2015, China and the AU signed a memorandum of understanding to cooperate on developing major transport infrastructure networks (high-speed railways, aviation, and highways) and industrialization infrastructure. With the ambition to connect all 54 African states through transport infrastructure projects, this memorandum complements and aligns with Agenda 2063, which in turn aims to accelerate continental integration through the development of transport infrastructure and industrialization. Massive national and regional projects worth billions of dollars, mostly in the transport and [End Page 19] energy sectors, began to pop up across the continent. As of April 2019, China had BRI projects in 42 different African countries,4 and by January 2021 a total of 46 out of 54 African countries had signed on to become official...

Chinese or western finance? Transparency, official credit flows, and the international political economy of development

Why do some developing countries obtain more official finance from China vis-a-vis Western sources? This study finds borrower transparency significantly affects which governments borrow more from China. From a supply side perspective, Chinese lending agencies have incentives to lend more to untransparent borrowers. From a demand side perspective, untransparent borrowers have incentives to use Chinese finance to avoid Western pressure to become more transparent. These findings and explanations have three implications. First, they help explain variation in external debt composition across developing countries using official credit. Second, they have implications for the international political economy of developing countries’ financial ties to China. Third, they imply the use of Chinese finance may allow untransparent governments to remain so, an important implication for the political economy of development.

Green Incentive in Stock Market in China from the Perspective of Enterprise Green Information Disclosure

China's green financial system is developing towards the goal of green sustainability, which depends on the sustainable development of green enterprises. This paper identifies the green degree of enterprises from the perspective of enterprise green information disclosure, divides green enterprises and non green enterprises, and empirically tests whether there is green incentive in China's stock market, so as to judge whether China's stock market can allocate resources effectively. Firstly, based on the concept of green sustainable development, green factor and green efficiency factor are constructed, which are introduced into the three factor model of Chinese version respectively, and the four factor model of Chinese version is constructed. Secondly, take the A-share listed companies in Shanghai and Shenzhen from 2009 to 2021 as the sample for empirical analysis to study the green incentive phenomenon and influencing factors in China's stock market. It is found that the Chinese version of the four factor model can better fit China's stock market than the existing factor pricing model. There is a green incentive effect in China's stock market, that is, the stock market produces higher excess return for green enterprises, and the higher the green efficiency of enterprises, the higher the excess return.

Analysis of the Impact of Digital Finance Development on Household Consumption of Urban and Rural Residents in China

In recent years, China's digital finance has developed rapidly, profoundly changing the way residents live and consume. Especially in the context of China's Urban-rural dual economic structure, the impact of digital finance development on urban and rural household consumption is significantly different. The dual structure of urban and rural areas and the development model of financial efficiency and fairness have led to the imbalance between urban and rural development in China's financial system. Many economically backward rural areas have lagged behind in financial development. Digital finance has expanded the coverage and service scope of Inclusive Finance, and changed people's lifestyle and consumption habits. Realize the docking of consumption willingness and consumption capacity. Narrow the gap between urban and rural consumption. The study shows that the development of digital finance has significantly increased the consumption level of urban and rural households, but overall the impact on the consumption of urban households has been greater. Specifically, the depth of use of digital finance has a greater impact on the household consumption of urban residents, and the breadth and degree of digital financial coverage have a greater impact on the consumption of rural households. Further research found that there are differences in the impact mechanism of digital financial development on household consumption of urban residents and rural residents: The development of digital finance mainly promotes the consumption of urban households by increasing residents' incomes and reducing the uncertain risks faced by households, and increases the consumption of rural households by facilitating payment and alleviating liquidity constraints.

Wait-and-See or Whack-a-Mole: What Is the Best Way to Regulate Fintech in China?

AbstractChinese fintech, initially taking the form as “Internet finance,” is growing rapidly and poses great challenges to its financial regulatory authorities. Acclaimed as a new financial innovation, Internet finance was once accepted and even welcomed by the normally conservative Chinese financial regulators, who simultaneously adopted a wait-and-see strategy, to encourage such innovation and avoid overwhelming regulation. The benevolent regulation stance, however, bred rampant Ponzi schemes or fake financial innovation, resulting in tremendous monetary losses among lots of investors. To show a quick and active response, the central government popped into a whack-a-mole game, starting a four-year campaign of strict Internet finance regulation that has even cracked down on all the P2P lending platforms. This article analyzes the regulatory policy updates of Chinese Internet finance that is transforming to certain kinds of lawful fintech with difficulties, and that adaptive regulatory-organization restructure, regulatory-system optimization, and regulatory-model innovation would be more effective and constructive regulatory options.

Identification of End-User Economical Relationship Graph Using Lightweight Blockchain-Based BERT Model.

Current methods for extracting information from user resumes do not work well with unstructured user resumes in economic announcements, and they do not work well with documents that have the same users in them. Unstructured user information is turned into structured user information templates in this study. It also proposes a way to build person relationship graphs in the field of economics. First, the lightweight blockchain-based BERT model (B-BERT) is trained. The learned B-BERT pretraining model is then utilized to get the event instance vector, categorize it appropriately, and populate the hierarchical user information templates with accurate user characteristics. The aim of this research is that it has investigated the approach of creating character connection graphs in the Chinese financial system and suggests a framework for doing so in the economic sector. Furthermore, the relationship between users is found through the filled-in user information template, and a graph of user relationships is made. This is how it works: finally, the experiment is checked by filling in a manually annotated dataset. In tests, the method can be used to get text information from unstructured economic user resumes and build a relationship map of people in the financial field. The experimental results show that the proposed approach is capable of efficiently retrieving information from unstructured financial personnel resume text and generating a character relationship graph in the economic sphere.

China's Global Finance Footprint 2005–2014: Comparing AidData and CGIT

AbstractThe growth of Chinese global official finance has stimulated great interest among foreign aid advocates. Yet, until now, a lack of systematic data reporting has limited our understanding of Chinese official finance. Against this background, this article describes and compares two internationally comparable Chinese datasets from 2005 to 2014: AidData and the China Global Investment Tracker (CGIT). This study summarises China's priority areas of investment and the actual volume of Chinese finance, including a breakdown of these estimates by region and sector. Despite significant disparities between the two databases, this study shows that Chinese investment preferences in terms of locality and priority sectors are broadly consistent with the existing pattern.

Research on the Development Status and Regulatory Countermeasures of Financial Technology in China

The rapid development of financial technology has brought about a significant impact on China's financial services. The development of innovative technologies based on big data, cloud computing, Internet of Things, artificial intelligence and other technologies has played a positive role in improving the overall efficiency of China's modern financial system, but it is also accompanied by some risks. How to prevent the risk of financial technology development, improve financial technology innovation, and develop the real economy is a serious problem facing China's financial regulatory authorities. This paper analyzes the development status and trends of financial technology and the risks faced by the development of financial technology, and puts forward corresponding regulatory policies.

Protection of Foreign Investment in China: The Foreign Investment Law and the Changing Landscape

China’s foreign investment law regime has experienced significant changes in recent years. A milestone came with the passing of the Foreign Investment Law (FIL) in 2019, replacing the laws and regulations that had governed foreign investment in China for four decades. This article first undertakes a political economic analysis to determine the relevance of internal and external factors contributing to the changes. It then discusses the key characteristics of the FIL and reveals how it is designed to create a liberal, stable, fair, transparent and accountable regime to promote and protect foreign investment. Although the passage of the FIL ushered in a new era of foreign investment in China, many important issues remain unresolved and further actions must be taken to ensure its smooth implementation. To support the sustained development of its foreign investment regime, China must address existing laws and regulations that are incompatible with the new regime, clarify key issues that the new law fails to address, issue clearer guidance on national security, shorten its ‘negative list’, promote opening up and enhance regulatory transparency.

The internationalization of the RMB in view of the control over the Chinese financial system

The internationalization of the RMB in view of the control over the Chinese financial system

Systemic risk in the Chinese financial system: A panel Granger causality analysis

In this paper, we investigate China’s changing financial interconnectedness via the presence of Granger-causality between firm level factors (Leverage, Market To Book Value and Returns) and systemic risk measures (ΔCoVaR, MES, and SRISK ). The analysis is based on 161 Chinese financial intermediaries (14 Traditional Banks, 16 Finance Services, 131 Real Estate Finance Developers) continuously listed over the period 2007:1–2021:1. We find that, in addition to traditional banks, finance companies and real estate finance developers pose systemic threats to the Chinese financial system, in particular during the Global Financial Crisis and the 2015 Chinese stock crash. Finally, the outbreak of COVID-19 pandemic has put under strain the Chinese financial system, in particular the finance services.