Lessons from ＂Audit Storm＂ in China

The phenomenon of ＂Audit Storm＂ in China shows that transparency in government audit has been improved and increasing attention from the public has been paid to it, as government auditing and the mass media in China make joint effort to become a powerful source of supervision of government financial administration. Lessons drawn from Audit Storm show that more need to be done to systematically ensure public accountability in China, including improving the independence of China National Audit Office （CANO）, strengthening the manning of Chinese National People＇s Congress （NPC） and Ministry of Finance （MoF）, improving NPC and MoF joint cooperation with CNAO, insisting on more transparency in public funds allocation and management, the introduction of an effective responsibility system, and so on.     

Productivity,Economic Growth and the Middle Income Trap： Implications for China

This paper explores the middle income trap （MIT） concept from the perspective of productivity growth. Through the examination of cross-country historical statistics as well as China＇s regional data, it sheds light on the debate about whether the Chinese economy can avoid the middle income trap. It should be one of the first papers proposing an analytical framework to address this controversial issue. The findings should have important implications for economic policies guiding China＇s development in the coming decades.     

Will Inequality Lead China to the Middle Income Trap？

China has departed from the East Asian development model by letting inequality rise to a high level, which is now contributing to China＇s current problems of macroeconomic imbalance, declining efficiency of capital, and rising social tensions. If inequality persists, China may get caught in the ＂inequality-trap,＂ which may then lead to the middle income trap （MIT）. Fortunately, China still has the levers to pull to reduce inequality and avoid the MIT. Measures along both the ＂wage route＂ and the ＂redistributive route＂ can be adopted for this purpose. In addition, China may pursue the ＂cooperative route＂ to more equitable distribution.     

The Mechanism of the Middle Income Trap and the Potential Factors Influencing China＇s Economic Growth

Data from WDI show that developing countries are easily caught in the ＂middle income trap.＂ To interpret the mechanism of the ＂middle income trap,＂ this paper focuses on： （1） Based on the empirical framework of economic growth, we perform an empirical research on the determinants of economic growth at different income levels and discover that fixed capital investment, FDI and human capital accumulation are the main factors influencing less developed economies while for the upper middle income level and high-income level countries, the engines of economic growth change to institutions and R＆D. （2） We discuss the possible reasons why developing countries can have rapid economic growth before reaching the middleineome level, but cannot transform growth mechanisms in the middle income level. （3） We classify the factors that have influenced China＇s economic growth since the reform and analyze the potential ones for China＇s future development.     

Possibility of a Middle Income Trap in China： Assessment in Terms of the Literature on Innovation,Big Business and Inequality

This paper discusses the possibility of China falling into the so-called middle income trap in terms of three checkpoints： innovation capability, world-class big businesses, and inequality. Based on these criteria, our conclusions are as follows： First, China has increasingly become innovative and thus differs from other middle income countries. Second, China has many successful big businesses, a number disproportionate to its size. Thus, China differs from other middle income countries with few world-class big businesses, and the only qualification is that those big businesses are mostly non- manufacturing firms focused on such areas as finance, energy, and trading. Third, China faces great uncertainty in terms of inequality. Although several signs show that the Kuznets curve will come to represent China, as noted by the gradual reduction of surplus labor and rising wage rates starting in the coastal provinces, the Chinese are now facing new sources of inequality in China, such as wealth （including financial and real estate assets） and non-economic factors （including corruption）.     

CONTENTS

Confucian Ethic and the Cultural Logic in Economic Development
ZHANG Jie （China Financial Policy Research Center, Renmin University of China, Beijing, 100872, China）
Abstract： Opinions differ in academic field regarding the relationship between Confucian ethic and economic develop- ment. The research done in the paper suggests that Confucian ethic originated from the practical demand of guaranteeing the smooth operation of family organization. Afterwards, it served as a coordinator between government and individuals, thus bringing about the institutional compromise bet,~een family and bureaucracy which constituted the foundation of market system unique to China. Institutional equilibrium between government and other market forces will be the key el- ement in the successful development of market economy, which, as can be predicted, will have everything to do with Confucian ethic. In the paper, the author holds that Confucianism features internal conflicts on macro-versus micro-lev- els. On the macro-level, it has set a very high threshold for wealth and morals while on the micro-level little attention has been paid to how to create wealth. Thus it is rational and justified for the foregone reform to have put priority on ab- sorbing the merits of the western system which is based on protestant ethic so as to increase wealth accumulation. How- ever, such a process is lack of stability and tolerance and is prone to deviation of wealth from morality. This is where Confucianism steps in to function as a corrector. The paper concludes that the long separation of wealth accumulation from its own cultural tradition has become the biggest obstacle to future growth. In the face of intensifying conflicts in economic society, the only correct choice is to retrieve tradition and have the economic reform rooted in its own cultural soil. Key Words： Confucian Ethic; Institutional Compromise; Endogenous Market Function; Economic Development; Cultural Logic     

Empirical Examination of the Effects of Competition and Regulation on Public Universities and Colleges＇ Performance in China

Competition and regulation are indispensable entities for a university＇s improved performance. Using university rating as an index to performance, empirical analyses with the data from 145 public universities and colleges in China show that increased competition in the education service market is associated with higher university＇s （college＇s） performance. And increased competition in R＆D may make a quadratic effect on university＇s （college＇s） performance. University＇s performance improves when a university is directed as a branch of the central government because they enjoy some degree of management flexibility more than the local government controlled ones. A major implication of the study is the need to reform competition and regulation for improving universities and colleges＇ operating performance in China.     

On Efficiency of the Compulsive Institution in the Environment Governance

Limited by the condition of information, technology and natural elements, the compulsive institutions in the environment governance can not form a “hard constraint” to the individuals. Because of the individual‘s speculative behaviors, the government‘s deviation from its environmental governance, and the non-cooperative game between individuals and the legal organization, the implementation of the compulsive institutions is not as good as being expected. Through analyzing the mechanism of the compulsive institutions, this paper puts forward some suggestions to enhance the efficiency of such institutions‘ implementation.     

Mixed Market Competition in a Quality Differentiated Duopoly Model An Approach to Banking Sector

This paper attempts to develop a theoretical framework to investigate the competitive implications of quality choices of financial institutions whereby they charge prices to consumers based on their willingness to pay for the service qualities in the mixed market scenario under vertical product differentiation model. Initially, it analyzes benchmark equilibrium solutions of monopoly and duopoly to establish the degree of quality differentiation between two private banks in an uncover market configuration. Further, it estimates the quality differentiation between private and public banks, and examines the interaction between two market structures keeping public bank as both leader and follower, and then measures the social welfare from different prospectives. The explicit operation of two stages Nash equilibrium game forecasted that public banks＇ monopoly seems to be still better than a private banking, and it is socially optimal. The outcome demonstrates a significant importance of vertical quality differentiation for policy implication in banking industry and provides an insight on the reasons of particular co-existence of public and private banking services in the specified location. In this context, it is concluded that the presence of public banks in banking industries is a crucial condition for obtaining the higher range of social welfare.     

The Evolution of the Use of Space：Lessons from Beijing

Specific changes in land use can, and often do, occur when any social economic system moves from one form to another. When traditional societies transit from traditional land uses to philosophically determined land uses, as in the case of the introduction of sooialism or the transition from system of planned economy to a market system, such changes seem concentrated and perhaps exacerbated. Certainly, such circumstances provide the opportunity to see the process of social philosophy and its impact upon land use in a telescoped fashion. The discovery and explanation of these elements might provide some insight into basic human behavior, and its relationship to social controt and how people organize space both with and without control. This paper presents the results of observations of changes in land use as they have occurred during the course of transitional economic development in Beijing, China for the past decade, it suggests three new generic categories that can be applied to any culture or society.     

＂A Raft in the Stormy Sea＂： New Roles,New ＂Dresses＂ Operating in ＆ for Business Networks

This paper aims to discuss the development and functioning conditions of business networks. After recalling the main characteristics of post-fordistic environment and comparing it to a ＂stormy sea＂ （section one） of the paper focuses on the idea of networks described as ＂rafts＂ useful to firms to build their own competitive advantages. In fact, while theoretical knowledge is not so valuable because everybody can have it, practical and contextual knowledge is specific and therefore it can be defended. The development of a contextual knowledge is feasible if the firm chooses among all the possible alternatives. Subsequently in section two, it shows how fordistic principles eliminate space, reduce time, and increase the speed of communication among individuals and as entering a network has become a necessity as it allows a firm to obtain competitive advantages. The greatest benefit is the chance to share the task of creating new knowledge among different members. In section three it is discussed if navigation in the post-fordistic stormy sea could take advantage from the existence of a more certain regulation. It is necessary to underline that positive law is not a post-fordistic tool. There is no satisfactory detailed law regarding ideas, knowledge, and know-how, by now. Therefore, it is not possible to rely on a specific regulation framework to protect knowledge found on the network. In conclusion in section four, the work discusses how single organizations need to reach the ＂raft＂--which is the network--through the idea of sharing learning and distinguishing elements necessary to survive in the stormy sea post-Fordism environment. Lastly, section five would be analyzed a public institution--Milan Chamber of Commerce--which has ＂changed its dress＂ to more effectively perform its support role to firms.     

Market Transition and Income Inequality in Urban China： Evidence from Shapley Value Decomposition

China＇s market-oriented reform is expected to strengthen the role of the market in allocating resources, which raises concerns over the impact of market transformation on income distribution and earnings inequality in the past decades. This paper decomposes the sources of inequality based on the newly developed Shapley value approach and examines the contributions of the market, along with other nonmarket factors, to total inequality. Using the China Health and Nutrition Survey data over the period 1989-2009, we find that the income gap between laborers with a higher level of education and those with a lower level has widened since the transformational reforms of the economy. Our results suggest that the largest contribution of changes in income inequality can be attributed to the increase in returns to education, while the relative contributions of the household registration （hukou） system, type of sector ownership, geographic location, and gender to inequality experienced a downward trend between 1989 and 2009. The authors argue that rising income inequality is the consequence of efficiency improvements and an imperfect economic system, and that the market is a decisive force in economic development as it releases competitive signals and creates incentive mechanisms for innovation. Creating a more efficient labor market and increasing investment in human capital, particularly equalizing educational opportunities and improving the quality of education in lagging rural and inland regions to disadvantaged groups, are significant for an equitable distribution of income and sustainable development in the long run.     

Establish Rational Ecological Man to Construct the Harmonious Society

Rational Ecological Man （REM） is the integration of government, enterprise and the public, which plays an important role in our society. This paper firstly clarifies the definition of REM and regards that REM differs essentially from Rational Economic Man. Subsequently, the.paper analyzes the signi＇ficance of establishing REM to construct the harmonious society. Finally, the paper provides some specific suggestions on how to establish REM.     

Who Supports Redistribution? Subjective Income Inequality in Japan and China

Governments reduce income inequality with redistribution policies. These policies are often contentious because people who live in the same country have different preferences for redistribution. Some prefer the government to do more while others prefer the government to do less. Hence what explains the difference in preferences? Using the methodologically suitable cases of Japan and China, this paper contributes to the redistributive preference literature by proposing an alternative theory of how a person's subjective evaluation of and experiences with income inequality—subjective income inequality—affect his/her redistributive preferences. Specifically, a person who feels that his/her country's level of income inequality is too high is more likely to support government redistribution. But contrary to extant studies, this paper finds that a spatial locality's level of objective income inequality does not systematically affect its citizens' preference for redistribution. This finding has implications for redistribution policies because government policies in Japan and China—as with other countries—narrowly frame income inequality in the objective dimensions by pegging it to "objective" income inequality indices(e.g., Gini ratio), thereby ignoring the more important subjective dimensions of income inequality.     

A review of Chinese NIMBY study based on literature content analysis

Chinese NIMBY movements have entered a period of intense outbreaks. To clarify the status of NIMBY study, 146 NIMBY research literatures from CNKI were selected and content analysis was adopted to classify and research the fi ve indicators including perspectives, academic norms, research methods, reasons exploring and governance mechanism. It was found that the literatures normative and the level of scientifi c research methods need to be improved and research questions need to be more refi ned. To enrich the academic achievements, there are three more detailed aspects of NIMBY: prevention mechanism, citizen participation mechanisms and mechanism of social organization.These research can provide support for local government to resolve the confl ict of NIMBY and build a harmonious society.     

The difficulties of ＂polluter pays＂ policy in agricultural pollution in UK and methods to improve it

Agricultural wastes poll,tion became serious after great improvement in technology and the encouragement of production for the government since the end of the World Wai Ⅱ. Economists and environmental scholars suggested that ＂polluter pays＂ policy be employed in agricultural pollution control. However, it was hard to implement ＂polluter pays ＂ policy alone in agricultural wastes pollution.In practice, there were two social faCtors which contrih,ted to the improvement of water quality in the southwest of United Kingdom. One method is to communicate with farmers and then give farmers some advice or exhortation on facilities and management. The other method is to set up a telephone hotline for public to report water quality and probable pollution. Therefore, the consideration and combination of social factors in the control of agricultural wastes pollution are necessary, and important. Edueation of basic natural sciences relevant to agricultural pollution, system management of agricultural pollutants and laws relevant to agricultural pollution is suggested to be the third .social factor that British government can consider.     

Comparative Study on Venture Capital among U.S.A., Japan and China

This essay, through comparing venture capital in China＇s modernization with U.S.A., Japan, summarizes the different characteristics of venture capital of the United States and Japan, and thinks that China＇s present modernization, as a flag of developing countries, has already entered middle period of industrialization, according to the experience of U.S.A., Japan and reality of China. The technological progress mode has already been changed from technology import to technological innovation stage at this time. In order to encourage innovations, we must develop venture capital in a more effective manner. The national conditions have determined the technology import of China, which must start with a high points, this is the most important condition of target to choose. The venture capital of China in system transitional period should use U.S.A.＇s experience for reference even more on the capital source to pay close attention to the capital sources of the government and bank. Once the government guides and starts the market, the folk capital will show the natural instinct of the capital automatically Risk investment is the embodiment capitalized personality spirit, in order to dispose such ambitious culture. We need the reform of the system as well as dispose risk investor＇s stratum at present.     

An important way to build a new socialistic countryside： developing circular economy

It was put forward in the Fifth Session of Sixteenth Central Committee of the Party that ＂it is a great historic mission on the path for China to modernization to construct new socialistic countries＂, and that ＂according to the requirements of developing production, ample life, civilized countryside climate, clean countryside, democratic management, urban and rural social and economic development should be unifiedly planned, modern agricultural construction should be promoted, rural reform should be deepened all round, rural public service should be advanced, and peasants＇ income should be increased by all means.＂ Some time ago Premier Wen Jiabao pointed out that problems about the carrying capacity of resources and environment, for example the decrease of arable land, the lack of freshwater and eco-environmental deterioration, will be tough challenges to agricultural development in China. According to the requirement of constructing economical society and environment friendly society, agricultural circular economy should be advanced to lengthen service life of limited agricul- tural resources. In fact, this is congruous with the policy of developing agriculture by ＂Scientific Concept of Development＂. The spirit of the Fifth Session of Sixteenth Central Committee of the Party and Premier Wen Jiabao＇s speech will guide us to the direction of constructing new socialist countries, From the practice of developing agricultural circular economy, circular economy can be applied to expansive rural areas and is of great significance.     

Research on Corporate Governance Cost

According to the concept of corporate governance, we deduce four principles of corporate governance cost. There are （1）any cost caused by relative activities from separation between property right and management right must be reckoned in corporate governance cost; （2）cost of activities in the cross area in which governance activities or other activities cannot be distinguished should be reckoned in relative cost according with characters of the main operational activities; （3）cost caused by corporate governance activities of external ＂Stake Holder＂ also should be reckoned in corporate governance cost. After thorough analysis of the above three principles, we define corporate governance cost as the cost caused by governance activities from separation between property right and management right as well as those originated from external stakeholders. Its boundary accords with the boundary of accountant mergence report forms. We briefly offer some analysis methods of corporate governance cost and some advices of disclosure of relevant information.     

County financial ecology and the development of new socialist countryside in China

The new rural construction will involve many fields, such as the upgrade of the industrial structure of agriculture, the impravement of the efficiency in the use of agricultural resources, the increase of farmers＇ income, maintaining sustainable agricultural development, and strengthening the construction of agricultural service system and circulation system.Finance, as the core of modem economy, should serve the new rural construction. However, there are many problems about the financial system in the rural area for a long time. So it is vital to build a good county financial eco-environment to promote the development of county financial systems and give full scope to the supporting function of finance. Only when we solve the problems in rural financial ecology and make clear the government ＇s fanction and activities, the county financial environment can function and be improved. Based on the reality of county economic development and starting from the connotation of county financial ecology, this paper analyzes the status quo of county financial eco-environment, especially the significance of optimizing the county financial eco-environment under the macroscopic background that the country proposed the socialist new rural reconstruction, and proposes the opinions and suggestions to construct and the maintain county financial eco-environment.