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Although divided by political and military conflict and deep suspicion and mistrust, China, Taiwan, and Hong Kong have become one integrated economic region. This has been the result largely of flows of direct investment from Hong Kong (HKDI) and Taiwan (TDI) into China. China has become the largest recipient of foreign direct investment (FDI) among the developing world and the second largest globally. Most of the FDI received in China came from Hong Kong and Taiwan, not from the industrial countries that supply over 90 percent of world FDI. This paper investigates the determinants of China's FDI boom in the context of the greater Chinese economy. Evidence presented in the paper indicates that the large amount of HKDI and TDI has been associated with the greater Chinese economy and 'Chinese connections.' Empirical results suggest that HKDI and TDI were primarily motivated by cheap labor, incentive policies, and market access, along with the greater Chinese connections that provide Hong Kong-Taiwan investors with operational advantages over other investors. [ABSTRACT FROM AUTHOR]

China is widely perceived as having a problem in business ethics. One view holds that elements of Chinese culture tend to encourage unethical business decisions. Another perspective says that China has business ethics issues because its economy is in transition. The unclear rules of the game create opportunity for business ethics problems. The large amount of new wealth creates incentive to cut corners to get rich. Thus China, perhaps more than more developed economies, is seen as having business ethics problems. However, good business ethics help a society as a whole, and some say that good ethics can be a source of competitive advantage for an organization. Steps can be taken to improve Chinese business ethics at the societal level, at the individual level, and, importantly for this paper, at the organizational level. In addition to ethical leadership, we believe that one key to improving ethics at the organizational level is human resource management. Improvement can be made in the areas of recruitment, selection, performance appraisal, performance management, compensation, and benefits. Personnel policies can help ensure ethical conduct within the organization. [ABSTRACT FROM AUTHOR]

An overview of the insurance market in China is provided, with a special focus on issues associated with China's accession to the WTO. Despite the rapid growth of China's insurance industry, its insurance market remains relatively underdeveloped. After China's accession to the WTO, the average efficiency of domestic insurers increased. Opening the market to foreign insurers helped to make domestic insurance companies and the national economy more efficient and improved social welfare. [ABSTRACT FROM AUTHOR]

This article examines the financial linkage between the RMB and other Asian currencies before and after the Asian financial crises in 1997 and 1998 to shed light on the role of China in Asian monetary integration. A newly developed econometrics methodology is employed to test the relationships among financial time series. Empirical test results indicate that correlations between the RMB and other East Asian currencies were higher after the 1997 Asian crisis than before the crisis. [ABSTRACT FROM AUTHOR]

China's involvement in Africa has caused much debate. The increasing presence in Africa has drawn mixed reactions from the academic and media platforms. It has been argued that China is sapping Africa's manufacturing potential and also extracting Africa's resources without any significant benefits to Africa. Thus China is seen as a contributor to Africa's underdevelopment and deindustrialization. However, some have seen China as Africa's partner for development. They see China's presence in Africa as beneficial to China and Africa. As a result, there is no settled opinion as to whether China's increasing presence in Africa is sustainable to Africa or whether the relationship is unsustainable. Although the relations between China and Africa are widely covered in the media, empirically the area has been underresearched. This article, therefore, contributes to literature by surveying the major political and economic issues around the China-Africa relations. The article considers several issues relevant to the China-Africa relationship. [ABSTRACT FROM AUTHOR]

This article empirically examines the association between earnings management and initial public offering (IPO) performance (underpricing and post-issue stock performance) of Chinese small and medium enterprises (SMEs). The analysis is based on a sample of 464 IPOs listed on the Shenzhen Stock Exchange (SZSE) SME board during 2006-2010. Consistent with our expectations, this article finds that a higher level of total discretionary accruals prior to the IPO is associated with a higher level of underpricing and poorer long-term stock performance. However, when total discretionary accruals are decomposed into current and long-term accruals, the associations are insignificant. The results are robust with respect to several alternative measures of earnings management and stock performance. Statistics also show, on average, Chinese SMEs have positive 3-year long-term stock returns relative to various benchmarks, and only firms with incomeincreasing accruals suffer long-term underperformance. Findings from this article add important new evidence to the literature as Chinese SME IPOs tend to perform differently compared with main board firms, likely because of their unique features. [ABSTRACT FROM AUTHOR]

Introduces a series of articles which deals on the Chinese economy.

The debate on the relationship between China's income gap and marketization is ongoing. The influences that different modes and aspects of the marketization process have on the income gap have been theoretically analyzed in this article. From the empirical aspect, the statistical yearbook data of various provinces are used to calculate the Gini coefficient of urban residents' disposable incomes from 1997 to 2010, and then to investigate the effects of the marketization process and other factors on the income gap. The empirical results confirm the theoretical hypothesis: The overall effect of marketization is to narrow the income gap significantly. The empirical analysis also shows that the main reasons for China's increasingly expanding income gap lie in the promotion of education and in insufficient employment opportunities. This indicates that the human capital of the employed and market risk have become crucial factors affecting China's income distribution. The influence of the aging population structure transition, economic growth, and other factors impacting the income gap is investigated. Corresponding policy recommendations on how to narrow the income gap are proposed. [ABSTRACT FROM AUTHOR]

Using a panel data set of 200,000+ Chinese firms constructed by merging the Chinese census of manufacturing firms for 2000-2005, we compare the performance of Chinese state-owned enterprises (SOE s) and private firms in terms of rates of return, productivity, growth, costs, and investment. Using panel regressions, we find that Chinese industrial state-owned enterprises are, indeed, less efficient than private firms and pay less attention to costs, inventories, accounts receivables, investment, employee welfare, financing, and administration. We find that this adversely affects their performance. The findings are consistent with the soft-budget constraint hypothesis. [ABSTRACT FROM AUTHOR]

Over the past thirty years, reforms in China have pushed forward the integral development of the economy and opened up agriculture to modernization. Small farmers who obtained independent production and operating rights during the reform period must now confront the pressure of market competition. The "Investor-Owned Firm (IOF) + farmers" mode or leading-enterprises-led mode has pioneered agricultural industrialization in China. However, it has some limitations in terms of contract instability and its inability to ensure farmers' rights and interests. At the same time, cooperative organizations of small farmers have been legally accepted and supported by the government and are developing rapidly. In this article, we analyze the alternative modes of agricultural industrialization, especially the effectiveness and limitations of farmer cooperatives. We find that farmer cooperatives are going to play a more and more important role in the foreseeable future, while the leading-enterprises-led mode will also persist as a key contract form in agricultural industrialization. [ABSTRACT FROM AUTHOR]

Beginning on January 1, 2007, all Chinese-listed companies were forced to implement the new set of accounting standards released by the Ministry of Finance in 2006. Using the first-quarter data for 2007 and then conducting robust tests with annual data, the authors found empirical support for their conclusions regarding the implementation and effects of accounting standards. Based on new institutional economics theory, they concluded that when the same accounting standards were implemented throughout China, the consequences were significantly different in various regions depending on the regional level of economic development and growth rate. The study's most important contribution is its enhancement of the understanding of International Financial Reporting Standards (IFRS) implementation around the world. [ABSTRACT FROM AUTHOR]

Corporate insurance was the dominant sector of the property insurance market in China before 1989. However, in recent years the growth rate of corporate insurance premiums has steadily slowed and the share of this business line in total property insurance has decreased dramatically. Factors having an impact on the demand for corporate insurance are explored, using provincial-level panel data to extend the empirical analyses in previous studies on this topic. The regression results show that the loan ratio, the corporation tax ratio, and the proportion of foreign-owned companies are significantly related to demand for corporate insurance and are consistent with the predictions of theoretical economic models. The effects of gross domestic product (GDP) and industrial structure cannot be ignored. The findings provide valuable insights for both insurers and regulators in China. [ABSTRACT FROM AUTHOR]

This article analyzes insurance schemes based on the weather index for drought- and flood-related risks in rural China. It evaluates, both technically and operationally, the accomplishments and challenges of a weather index insurance pilot. The main lessons are summarized, followed by a series of recommendations that include improving the availability, accessibility, quality, and quantity of data, increasing government support, utilizing existing networks as platforms for index insurance, raising awareness and promoting creative marketing campaigns, developing a strong legal and regulatory framework, exploring index insurance for government to use in disaster management, and fostering participatory mechanisms, coordination, and balance. [ABSTRACT FROM AUTHOR]

The world's economic system and ecosystem have everything to gain by teasing apart the issues related to infrastructure and climate change in China. If China is to sustain its economic growth and improve its living standards over the next several decades, huge sums of capital will be needed to finance green infrastructure in energy and water. While cooperative approaches between government and the private sector are necessary, global capital markets can vet infrastructure projects and technologies to finance green infrastructure. The BOT and PPP approaches to financing infrastructure projects in China, based on "contract finance," have serious shortcomings. A more modern approach, based on "market finance," can raise the capital required for green infrastructure projects without creating undesirable consequences. [ABSTRACT FROM AUTHOR]

Provides information on the economic theory and history of the Chinese government. Discussion on textual research on the best government and the Jefferson-Mason consensus; Western tradition of the contract state and its welfare responsibilities; Details of the country's government powers and responsibilities in imperial China.

The article assesses the development of the Chinese economy. The author focuses on the factors which contributed to the Chinese economic growth, including the economic system. He emphasizes the merits of reform policies. The author assesses development performance within a specific context of comparison. He uses works critical of the old system before the reform.

This study examines whether there are changes to the inter-influence between the economic positions of Guangdong and Hong Kong. We use the Granger causality test to determine the mutual influence of Guangdong and Hong Kong in their economic positions. Our result indicates that there is a long-term cointegrating and stable economic relationship between Guangdong and Hong Kong. In addition, the result of the ECM Granger causality test suggests that the economies of Guangdong and Hong Kong are substitutes for each other but not complementary. Our analyses of the structural changes before and after 1997 show that the lead economic position between Guangdong and Hong Kong changes before and after 1997. [ABSTRACT FROM AUTHOR]

Private enterprises are the most remarkable subjects in the theoretical studies of China's economic transition. This article tries to describe the rough track of the process of China's reform, analyzing it from a new perspective based on the main studies in the field. The article concludes that the internal aspects of China's private enterprises have been significantly changed. As private enterprises have gradually become enterprises in the sense of mainstream economics, mainstream economic studies have begun to switch their focus from "explanations of the issues" to "solutions." An interesting question is, What will future developments be, when, under the current conditions, the basic property rights of private enterprises have not yet been clarified? Current experience and studies on this issue have not provided us a clear answer. [ABSTRACT FROM AUTHOR]

Since the 1990s, private enterprises have developed as an important force in China's economic growth. However, they also need to resolve many issues in the process of their development. This article demonstrates that the system transition of enterprises and innovation of management models have a decisive significance in the current phase of development of China's private enterprises. It summarizes "the three dimensional models" of the growth management of private enterprises, and offers some valuable suggestions for managing the direction and pace of growth in different growth phases and the driving force of private enterprises. [ABSTRACT FROM AUTHOR]

Focuses on the origins of the rent-seeking behavior, or the illegal profiteering of government officials and private individuals from government-created scarcity, in China and its social and economic impacts. Social origins of contemporary rent seeking; Details of the informal social networks which contribute to the creation of rent seeking activities; Discussion of the culture of corruption and coveting wealth in Chinese history and its relevance to contemporary rent-seeking activities.

Discusses several issues related to the reform of state-owned enterprises in China. Phases and trends in the reform of state-owned enterprises; Challenges to the reform of state-owned enterprises; Reasons for the incompatibility of the market economy and state-owned firms.

Provides information on a study which discussed the process of financial liberalization in China. Description of its domestic stock market; Overview of the country's corporate bond market; Description of the issue of corporate governance.