Kleinbrod The Chinese Capital Market

Performance, Parameters for Further Evolution, and Implications for Development
1. Auflage 2008
ISBN: 978-3-8350-9260-0
Verlag: DUV Deutscher Universitäts-Verlag
Format: PDF
Kopierschutz: Adobe DRM (»Systemvoraussetzungen)

E-Book, Englisch, 435 Seiten

Annette Kleinbrod analyses the Chinese capital market and examines to what extent the stock and bond markets contribute to the financing of China's development. Her approach takes into account the relatively recent re-emergence of the stock and bond markets in China, the limited data available, and the country's current dynamics.

Dr. Annette Kleinbrod promovierte bei Prof. Dr. Erich Priewasser am Lehrstuhl für Allgemeine Betriebswirtschaftslehre und Bankbetriebslehre an der Universität Marburg. Sie ist als Projektmanagerin China für GTZ International Services tätig.

Autoren/Hrsg.

Kleinbrod, Annette

Inhaltsverzeichnis

1;Acknowledgements;5
2;Table of Contents;7
3;List of Tables;17
4;List of Abbreviations;19
5;General Notes;21
6;1 Introduction;22
7;2 The Significance of Effective Development in China;26
7.1;2.1 Stability and Welfare as Governance Maxims throughout the Millennia;27
7.1.1;2.1.1 Momentous Historical Occurrences;27
7.1.2;2.1.2 From Sophisticated Power to Stunted Performance;31
7.2;2.2 China's Development Since 1978;35
7.2.1;2.2.1 Stability and Welfare Throughout the Course of the Reform Period;36
7.2.2;2.2.2 A Note on Conduct to Imminent Instability;38
7.2.3;2.2.3 Unequalled Achievements in Regaining Momentum;41
7.3;2.3 Considerations for the Future Path of Development;47
7.3.1;2.3.1 A Broad Array of Challenges;48
7.3.2;2.3.2 The Paramount Importance of the Financial System;50
8;3 The Connection Between the Capital Market and Development;54
8.1;3.1 General Aspects of Financial System Design;55
8.1.1;3.1.1 Resuming the Bank-based Versus Market-based Debate;56
8.1.2;3.1.2 Limited Applicability of an Overall Concept of Efficiency;58
8.1.3;3.1.3 Principle of Dynamism and Evolutionary Capability;60
8.2;3.2 The Finance-Growth and Finance-Development Link in Theory and Empiricism;62
8.2.1;3.2.1 Theoretical Concepts;63
8.2.2;3.2.2 Empirical Studies;64
8.3;3.3 Resulting Research Method;68
8.3.1;3.3.1 Fundamental Features of the Development Structure;69
8.3.2;3.3.2 Overview of the Role of the Capital Market in Effective Development;75
8.3.3;3.3.3 A Functional Perspective as a Starting Point;77
8.3.4;3.3.4 Evaluating the State of the Capital Market;91
8.3.5;3.3.5 Parameters Influencing the Capital Market;93
9;4 The Current Performance of the Chinese Capital Market;99
9.1;4.1 Rationale for the Stock and Bond Markets' Re-emergence Since the 1980s;100
9.2;4.2 The Stock Market Segment;102
9.2.1;4.2.1 Relevance of the Stock Market in Raising Capital;103
9.2.2;4.2.2 Particularities as to the Differentiation into Diverse Share Categories;105
9.2.2.1;4.2.2.1 Shares of Companies Incorporated in China;106
9.2.2.2;4.2.2.2 Shares of China-related Companies Incorporated Outside China;112
9.2.2.3;4.2.2.3 Market Segmentation in Transition;114
9.2.3;4.2.3 Companies Quoted on Domestic Stock Exchanges;120
9.2.4;4.2.4 Investors in Domestic Stock Exchanges;137
9.2.5;4.2.5 Data on Stock Market Performance;152
9.3;4.3 The Bond Market Segment;170
9.3.1;4.3.1 Relevance of the Bond markets in Raising Capital;172
9.3.2;4.3.2 Features of Existing Bond Categories;177
9.3.3;4.3.3 Secondary Market Options;188
9.3.4;4.3.4 Data on Bond Market Trading;193
9.4;4.4 A China-International Comparison of Capital Market Development;206
9.4.1;4.4.1 China's Stock and Bond Market Development as a Basis for Comparison;207
9.4.2;4.4.2 State of Affairs in Selected International Countries;214
9.4.3;4.4.3 A Concluding Remark on the Use of China-International Comparisons;226
10;5 Significant Parameters for the Chinese Capital Market;232
10.1;5.1 Institutional Framework;233
10.1.1;5.1.1 The Potential Impact of the Institutional Framework on the Capital Market;233
10.1.2;5.1.2 An Evolving Institutional Framework in China;235
10.2;5.2 Corporate Governance;241
10.2.1;5.2.1 The Potential Impact of Corporate Goyernance on the Capital Market;242
10.2.2;5.2.2 Pivotal Features of Corporate Governance in China;244
10.3;5.3 Reputational Agents;256
10.3.1;5.3.1 The Potential Impact of Reputational Agents on the Capital Market;256
10.3.2;5.3.2 The Role of Reputational Agents in China;257
10.4;5.4 Key Stakeholders Acting For Society;261
10.4.1;5.4.1 The Potential Impact of Stakeholders Acting for Society on the Capital Market;262
10.4.2;5.4.2 Key Stakeholders Acting For Society in China;263
10.5;5.5 The General Political and Economic Situation;274
10.5.1;5.5.1 The Potential Impact of Policy and the Economy on the Capital Market;275
10.5.2;5.5.2 Policy and Economy in the Course of the Reform Measures Started in 1978;275
10.6;5.6 Societal and Demographic Affairs;278
10.7;5.7 The State of Technology and Infrastructure;286
10.7.1;5.7.1 The Potential Impact of Technology and Infrastructure on the Capital Market;287
10.7.2;5.7.2 Trends of Technology and Infrastructure in China;287
10.8;5.8 Regional and Global Integration;290
10.8.1;5.8.1 The Potential Impact of Regional and Global Integration on the Capital Market;291
10.8.2;5.8.2 The State of China's Regional and Global Integration;291
10.9;5.9 Closing Notes on Significant Parameters;294
11;6 Opinions on Capital Market Performance and Its Potential;297
11.1;6.1 Method of Data Acquisition;297
11.2;6.2 Survey Results;298
11.2.1;6.2.1 Contribution to Financing Effective Development;299
11.2.2;6.2.2 Accomplishment of Capital Market Functions;304
11.2.3;6.2.3 Influence Exerted by Significant Parameters;312
11.2.4;6.2.4 Reciprocal Influence of the Significant Parameters;327
11.2.5;6.2.5 Greatest Obstacles to Further Capital Market Evolution;335
12;7 Prospects of the Capital Market and China's Development;338
13;Appendix;346
13.1;A Side Note on General Facets of the Notion of Corporate;347
13.2;B Side Note on the Civil Society Approach;357
13.3;C Glossary;363
14;Literature and References;374

Leseproben

2 The Significance of Effective Development in China (S. 5-6)

In conjunction with development, assuring stability (wendingf and welfare (fuli) have been viewed as imperatives by rulers throughout Chinas history and remain so in the rationale of the Chinese Communist Party, which has had to contend not only with social disorder, but also with loss of credibility during periods of its reign. With these imperatives in mind, the Chinese government initiated an unprecedented path of reform in 1978 which has had a substantial impact on literally every aspect of society as well as the countrys foreign relations. Viewed pragmatically, this has brought about the worlds fastest growing economy and has at the same time - when evaluated in the overall perspective - yielded substantial material benefits for its population. However, the road towards development remains fragile.

It presents significant economic and political challenges and also has troubling implications for both society and the natural environment. These are by no means insurmountable obstacles, but they need to be overcome. Successful economic growth is considered to be the pivotal means necessary to guarantee social stability and welfare, but more recently the government has also increasingly acknowledged the need to incorporate aspects related to quality and sustainability into its growth targets. An effective understanding of Chinas financing needs during the course of its further development, as well as the role of the capital market and its correlation with the developmental process, requires insight into central issues related to stability and welfare that are recurring themes throughout Chinas history and continue to this date. This will be presented for the era leading up to 1978 (Chapter 2.1) and the present reform period (Chapter 2.2) in order to allude to those patterns which are of importance for future development. Concluding passages will analyse significant challenges for and the critical task of financing the forthcoming development path (Chapter 2.3).

2.1 Stability and Welfare as Governance Maxims throughout the Millennia

Generally speaking, hindsight allows for a deeper understanding of development patterns, including the inherent strengths and weaknesses. This is an indispensable basis for anticipating future challenges and opportunities and particularly useful when trying to evaluate Chinas performance, especially considering that the country ranked amongst the most advanced nations in the world until the Song Dynasty (960-1279), when it entered a long period of stagnation, economically and otherwise, before entering a remarkable phase of revitalisation, which began with the start of sweeping reforms in 1978. It remains to be seen to what extent the recent achievements can in fact be sustained in the long run. This chapter first addresses three major historical facets of the approach towards development which continue to have an important impact on development processes (Chapter 2.1.1) and then analyses the performance actually achieved until 1978 (Chapter 2.1.2).

2.1.1 Momentous Historical Occurrences

Three significant aspects of development that occurred within Chinas 3,000 year history are depicted here in order to show the degree to which historical processes are still of major relevance for an effective development in China today, , namely (i) early efforts to foster stability and welfare and establish an institutional framework with particular regard to the specific situation in China, (ii) Chinas encounters with western nations from the nineteenth century onwards, and (iii) the establishment of the Peoples Republic of China, a form of communist-based governance which continues, to this date, to display distinctly Chinese characteristics.