1. Comparative advantage:
If a country’s opportunity cost (measured by other products) of producing a product in its own country is lower than that of producing the product in other countries In terms of opportunity cost, this country has a comparative advantage in producing this product.
2. To put it briefly, it is to use cheap labor and resources, have a huge consumer market, reduce costs (such as freight), etc.
3. Economic overheating
According to the definition of economics, when the actual growth rate exceeds the potential growth rate, it is called economic overheating. Its basic characteristics
Because aggregate demand exceeds aggregate supply, this triggers an overall and sustained rise in the price index.
The classic period of economic overheating in our country was in the early 1990s. In those years, my country's GDP growth rate exceeded 10% for several consecutive years. As total demand significantly exceeded total supply, inflation continued for several years.
Judging from the economic performance of this economic boom cycle, there has been no real comprehensive economic overheating so far.
4. Thoughts on the functions of my country’s capital market
Over the past decade, my country’s capital market has developed rapidly and achieved world-renowned achievements. In terms of the number of listed companies, the amount of financing and the number of investors, my country's capital market has reached a considerable scale. In terms of products and regulations and systems, the basic elements and basic framework of the market have been formed, and remarkable achievements have been made in the construction of technical systems. After continuous exploration and efforts, the functions and effects of my country's capital market have become increasingly apparent, and the degree of standardization has continued to increase.
The capital market, as an emerging market, plays an increasingly important role in the development of our country's economy in terms of financing and optimizing resource allocation.
Thinking about the functions of my country's capital market, comprehensively examining the structure of my country's capital market, comprehensively analyzing and comparing the mature systems of capital markets in developed countries, providing theoretical guidance for the development and improvement of my country's capital market, and benefiting the capital market Better serve the socialist modernization drive.
1. The concept of capital market
In the past, we thought that the capital market was a patent of capitalism, but now in China, it is no stranger and is used very frequently. of words. Among Chinese financial theories, capital market theory is the youngest. Because China's capital market is "immature" and "unpredictable", and many aspects are still in the process of experimentation, debate, and exploration, it is quite difficult to define it. Even in Western economics, capital theory is one of the most controversial areas. Perhaps due to the complexity of capital instruments, or perhaps due to the strong operability and variability of the capital market, people have very inconsistent understandings of the capital market. Therefore, there are various definitions of the capital market, and people can use it from almost any angle. And give it different connotations on different occasions. When some people talk about the capital market, they refer to the stock market, while others refer to the securities market. For example, in the special report "China's Emerging Capital Markets" published by the World Bank in 1995, quite a few experts defined the capital market as the securities market. They believed that the securities market is a modern market economy and the core part of the capital market. In the "International Capital Markets: Development, Prospects and Key Policy Issues" compiled by the International Monetary Fund in 1996, the capital market includes: foreign exchange market, bond market, stock market, derivatives market, banking system and loan market, etc. There is also the well-known American S "Kerry" Cooper's "Financial Markets" monograph, the scope of the capital market covers the mortgage market, bond market and stock market.
What does the concept of capital market mean?
Although different people have different opinions on the definition of capital market, it has a certain connotation. In the most general sense, capital market should at least cover: securities market (stock market, long-term bond market-long-term treasury bonds) , corporate bonds, financial bonds, etc.), long-term credit market (long-term mortgage loans, long-term project financing, etc.), derivatives market (financial futures market, financial options market, etc.). To sum up, we can summarize the basic concepts of capital market.
The capital market is the sum of all medium- and long-term capital (more than one year) transaction activities, including the stock market, bond market, fund market and medium- and long-term credit market, etc. The funds it circulates are mainly used as capital to expand reproduction. used, hence the name capital market. The capital market is a mechanism that guides resource allocation through expectations of returns.
2. Functions of the capital market
The capital market is an important part of the modern financial market. Its original meaning refers to the market formed by the long-term financing relationship. However, with the development of market economy today, the significance of capital market has far exceeded its original connotation, and has become a multi-level market system for social resource allocation and various economic transactions. Under the conditions of a highly developed market economy, the functions of the capital market can be defined according to its development logic as three aspects: financial financing, property rights intermediation and resource allocation.
(1) Financing function
The capital market in the original sense is a market in the sense of pure financing. It is symmetrical to the money market and is the sum of long-term financing relationships. Therefore, financial coordination is the original function of the capital market.
(2) Allocation function
It means that the capital market plays a guiding role in resource allocation by guiding the flow of funds. Due to the strong evaluation, selection and supervision mechanisms in the capital market, investment subjects, as rational economic persons, always have a clear profit-seeking motive, thus promoting the flow of funds to high-efficiency sectors and demonstrating the function of optimal allocation of resources.
(3) Property rights function
The property rights function of the capital market refers to its function in restricting the property rights of market entities and acting as an intermediary for property rights transactions. The property rights function is a derived function of the capital market. It plays an important role in the process of enterprise property rights reorganization by transforming the enterprise's operating mechanism, providing financing for enterprises, transmitting property rights transaction information and providing property rights intermediary services.
The above three aspects together constitute a complete functional system of the capital market. If one link is missing, the capital market will be incomplete or even distorted. The function of the capital market is not artificially assigned, but one of the attributes of the capital market itself. Understanding the functions of the capital market theoretically is of great theoretical and practical significance for us to correctly deal with the problems in the development of the capital market and to effectively utilize the capital market.
3. Discussion on the functions of my country’s capital market
(1) Overview of the development of my country’s capital market
Since the reform and opening up, the scale of my country’s capital market has expanded rapidly, and corporate bonds have and stocks are emerging. Start trading over the counter. After the establishment of the Shanghai and Shenzhen stock exchanges, China's securities market, especially the stock market, began to develop rapidly. As of the end of March 2006, there were 1,373 listed companies and 1,787 listed securities on the Shanghai and Shenzhen exchanges. There are 71.2795 million stock market investors and 64 securities investment funds. The total market value of stocks reaches 3.631 billion yuan, accounting for 54.08% of the GDP. Similarly, Chinese corporate financing, dominated by indirect financing, has made great progress in direct financing of Chinese corporates in recent years. The proportion of direct financing in new corporate financing lines continues to increase. With the development of the securities market, preventing and resolving financial risks has become an important issue that regulatory authorities are most concerned about. Especially after the outbreak of the Asian financial crisis in 1997, the management of the securities market was further strengthened. The capital market is a market for capital and property rights transactions. The transactions involve huge amounts of financial assets and are related to the vital economic interests of owners and users.
The healthy development of the capital market and its role in optimizing resource allocation in the national economy must be guaranteed by standardized, reasonable and fair laws and regulations. To this end, my country has established some regulatory agencies and legal systems to regulate the operation of the capital market. For example, the formulation of laws and regulations such as the "Securities Law", (Company Law), "Asset Assessment Management Measures", etc. have proposed relatively systematic behaviors for the parties to capital and property rights transactions, intermediary services, enterprises, companies, exchanges, etc. Standard.
However, compared with the capital markets of developed countries, my country’s capital market still has many shortcomings. First, the proportion of loans from banks and financial institutions in financial assets is still very high. Among the total financial assets of urban residents, bank deposits account for more than 75%, securities account for about 10%, and cash and other financial assets account for less than 10%. Second, the securities market is still small in scale and has an unreasonable structure, which is reflected in the stocks in the primary market. The proportion of issuance is too low, the proportion of securities circulating in the secondary market is too low, and the third is information asymmetry, and stock market prices and returns are highly unrelated to the company's actual performance. Fourth, China's corporate financing system is still dominated by indirect financing. , the overall scale of direct financing is still small, and from the perspective of the existing structure of corporate financing, indirect financing accounts for a larger proportion. Fifth, in terms of supervision, the standardization of supervision is not enough. Due to the short establishment time, my country's laws and regulations. The construction is relatively lagging behind, and there are still some areas that need to be improved.
Establishing a sound market economic system is the ultimate goal of China's economic system reform. With the continuous advancement of the market-oriented reform process of the economic system, China's capital transactions have become more and more important. The degree of marketization will also continue to increase. Especially after joining the World Trade Organization in 2001, the marketization process of China's economic system reform will also accelerate.
In summary, it can be seen that the marketization process of China's economic system reform will also accelerate. my country's capital market is currently in the early stages of development, and the task of structural adjustment and system improvement is still arduous.
(2) Functional evolution of my country's capital market
1. ．The formation of my country's capital market
To understand the initial functions of my country's capital market, it is necessary to briefly review the process of my country's state-owned enterprise reform. In the early stages of reform, we based on our understanding of the shortcomings of traditional state-owned enterprises, in the capital , The following two reforms were made in terms of profit distribution: First, the power was delegated to enterprises and a distribution system of proportional profit sharing was implemented to change the situation where state-owned enterprises did not have any autonomy in the use of funds under the traditional system of unified revenue and expenditure. It is to change the original financial allocation for enterprises (including fixed asset investment and working capital) to bank loans, so as to change the situation of enterprises occupying state funds for free. The reform has not achieved the intended effect. Since they have lost the constraints of owners, business managers are more inclined to allocate money to individuals as wages and bonuses, and the funds needed by enterprises to expand production mainly rely on bank loans. However, the reform of banks themselves has lagged behind, resulting in bank debts. The financial constraints of enterprises are not as strong as expected. Governments at all levels no longer inject capital into existing state-owned enterprises, and they also have no ability to inject capital into new enterprises when determining construction projects. Capital. In previous years, local governments relied on directing banks and other financial institutions to lend money to these projects. These enterprises have been in a state of so-called capitalless operation since the day they were established. State-owned commercial banks and other financial institutions have no right to participate in the identification of projects and are only ordered to provide loans to companies that have no capital and therefore no asset guarantees. In this case, since the loan was ordered, there is no reason why banks and other financial institutions should be fully responsible for the recovery of the loan. In fact, banks and other financial institutions generally rarely consider fulfilling this responsibility. Therefore, the risks of banks and other financial institutions are accumulating over time, bad debts and bad debts are increasing, and the quality of assets is declining. In fact, the reason why banks and other financial institutions have very weak restrictions on corporate claims is that quite a few companies believe that projects are determined by the government, and the government is responsible for whether the project is profitable. Once the project fails, the company has neither the ability nor the desire to return the money to the bank. principal and interest.
For a business that is built entirely on bank loans, business managers will think that the business does not belong to the government that does not actually invest funds, nor does it belong to the bank that ultimately requires the business to repay the loan. They may believe that the company should belong to all employees of the company. Therefore, the property rights relationship between enterprises is very unclear. As a result, corporate managers actually have the power to distribute corporate profits, but they throw the risk of corporate liabilities to banks. This is of course not conducive to corporate reform or the reform of the banking system.
As a result, people began to think that for state-owned enterprises, neither the ownership constraints of the state nor the creditor's rights constraints of state-owned commercial banks could transform the operating mechanisms of state-owned enterprises. To change the situation of state-owned enterprises operating without capital, it is impossible to rely on national finance as the national income distribution pattern has undergone great changes.
In other words, when the mechanism of social accumulation that mainly relies on the government under the traditional planned economic system is broken, the question of what kind of accumulation mechanism that is conducive to social development should be established becomes prominent. In addition to the disadvantages of unclear corporate property rights, lack of owner constraints, and excessive concentration of risks borne by banks, relying on indirect financing, that is, bank loans, for accumulation, it is also difficult to form effective supervision of state-owned enterprises due to the lag in the transformation of the bank's own mechanism. In this context, my country's economic circles have generally reached a consensus that direct financing should be developed, social savings should be transformed into investment through securities market financing, and listed companies should be encouraged to establish effective governance structures. It can be said that China's capital market is an inevitable product of reform and development to a certain stage.
2． The initial function of my country’s capital market
The formation process of my country’s capital market has given it its initial function.
⑴Create conditions for the reform of corporate governance mechanisms of state-owned enterprises
In foreign countries, the primary purpose of the emergence of securities markets is financing, followed by the allocation of funds, and the behavioral constraints on managers of listed companies are Comes with features. The emergence of my country's securities market has given it the responsibility to create conditions for the reform of the corporate governance mechanism of state-owned enterprises.
⑵ Provide funds for state-owned enterprises to escape difficulties
In recent years, the securities market has added a function to provide funds for state-owned enterprises to escape difficulties. Many people attribute the problems of state-owned enterprises to the high debt ratio and hope to reduce capital costs through listing and financing and help state-owned enterprises escape difficulties.
3． Pay attention to the resource allocation function
On September 22, 1999, the "Decision of the Central Committee of the Communist Party of China on Several Major Issues Concerning the Reform and Development of State-owned Enterprises" substantively emphasized the use of capital markets to promote the strategic nature of state-owned enterprises. Reorganization to achieve the purpose of improving resource allocation.
The problems of state-owned enterprises include high asset-liability ratio, low economic efficiency, and lack of competitiveness. They are caused by the inefficiency of corporate governance structure under the condition of single property rights. What state-owned enterprises face is, in form, an irrational financing structure. In essence, it is an irrational financing system and even the property rights structure and internal governance structure of the enterprise. The unreasonableness mentioned here mainly refers to two aspects: First, in addition to indirect financing from banks and direct capital injection from government finance, the direct financing channel through the capital market has not been opened; second, even if this channel is opened, if its role is only Limited to "circling money" without corresponding changes in the corporate property rights structure and internal governance structure, old drawbacks such as low asset utilization efficiency and serious bad debt problems will still exist.
The significance of developing the capital market lies in its potential to play a positive role in solving the above two problems. Since the proposal to bail out state-owned enterprises, capital market issues have been raised largely from a financing perspective. Opening up new sources of funds through the capital market is of course a good thing for companies with high debt and urgent need for funds. But for state-owned enterprises in the transition period, the more important significance of developing capital markets is to promote the transformation of the financing system, and then promote the transformation of the enterprise's property rights structure and internal governance structure. The importance of developing capital markets lies in imposing market mechanisms on state-owned enterprises during the transition period.
4. The positive role of developing capital markets in promoting the transformation of state-owned enterprises
From the perspective of promoting the transformation of state-owned enterprises, the positive roles of developing capital markets are as follows:
First of all, promoting the transformation of state-owned enterprises corporate restructuring. In order for an enterprise to enter the capital market, especially to become a listed company, the enterprise must first carry out standardized corporate restructuring in accordance with the requirements of the Company Law.
Secondly, promote positive changes in the corporate property rights structure and internal governance structure. When state-owned enterprises introduce new direct investment in the capital market, they also introduce new shareholders. Experience has proven that, except for a few special circumstances, a diversified shareholder structure, including a property rights structure composed of several state-owned shareholders, is more conducive to improving corporate efficiency than the solely state-owned form. On the other hand, if the new shareholders introduced by the capital market are too dispersed, such as basically small and medium-sized retail investors, the general "free-riding" behavior will be difficult to have an effect on corporate decision-making. For current state-owned enterprises, it is meaningful to introduce some institutional investors who can have a positive impact on the corporate governance structure.
Third, provide an effective capital flow mechanism for the strategic reorganization of state-owned enterprises. When the goal of strategic reorganization of state-owned enterprises is determined, the exit or entry of state-owned capital in some industries and enterprises can be realized through the sale and purchase of state-owned equity in the capital market. In more cases, state-owned shares can be encouraged to compete equally with other shares in the capital market, and competition can lead to a reasonable distribution of state-owned capital in industries and enterprises.
Fourth, promote corporate mergers and acquisitions and other asset restructuring activities. Another important part of the strategic reorganization of state-owned enterprises is to take advantageous enterprises that have grown up in market competition over the years, especially those that produce brand-name products, as leaders. According to the needs of the enterprise's own expansion, the enterprise will make its own decisions on suitable enterprises. Enterprises conduct mergers and acquisitions and other forms of asset restructuring activities.
Fifth, it is conducive to improving the transparency of corporate operations and promoting the preservation and expansion of state-owned assets. Enterprises entering the capital market, especially listed companies, have a high level of openness and transparency. They must be regularly reviewed by external audit institutions and publish their operating status and financial data to the public in detail in accordance with the rules. This will not only help state-owned shareholders understand the operating conditions of the enterprise, but also help other shareholders, especially individual shareholders, understand the operating conditions of the enterprise in a dual capacity (shareholders of individual shares and ultimate owners of property owned by the whole people), as well as direct owners of state-owned assets. The operation and management of state-owned assets by state-owned shareholders whose identities appear, thus improving the supervision effect on the preservation and increase of the value of state-owned assets.
Sixth, it is conducive to selecting competitive state-owned asset managers. Who should serve as the manager of state-owned assets has been a controversial issue for many years. Researchers have proposed many plans, and many departments, institutions, and enterprises have also put forward various reasons to try to prove that they are qualified for this role. In fact, when the capital market develops to a certain extent, this is basically an issue that can and should be decided by the market. Before entering the market, certain institutions can be designated as managers of state-owned assets, but this is not important. What is important is to see who is competitive after entering the capital market. Those with strong competitiveness will expand their business scale, while those with weak competitiveness will have to reduce their business scale and eventually lose their qualifications as managers.
Finally, the “debt” issue is solved by solving the “equity” issue. Equity and debt seem to be two independent issues. Expanding the proportion of self-owned capital through direct financing will correspondingly reduce the proportion of liabilities, which only causes changes in the asset structure. However, behind this structural change, the protagonists are the shareholders who exercise their equity. Funds raised from liabilities are used by shareholders and their chosen operators. The main problem with the financing system of state-owned enterprises is not the high or low debt ratio itself, but the lack of responsibility of existing shareholders and their agents for the funds raised through debt, and the resulting impulse to high debt.
Therefore, in order to solve the debt problem of state-owned enterprises, in addition to increasing capital and reducing debt, the key is to change the behavior of corporate shareholders and their agents. Otherwise, the reduced debt will still increase, and many debts will be unable to repay. In this sense, developing the capital market can, on the one hand, increase capital for enterprises, and on the other hand, it can create conditions for fundamentally solving debt problems by changing the property rights structure and internal governance structure of enterprises.
5. Okun's law
Proposed by American economist Arthur Okun, it is used to approximately describe the alternating relationship between the unemployment rate and actual GNP. The content is that every time the unemployment rate is higher than the natural unemployment rate by 1, the actual GNP is lower than the potential GNP by 3. For example, assuming the unemployment rate is 8, which is 2 higher than the natural unemployment rate, then according to Okun's law, the actual GNP is 6 lower than the potential GNP.
However, this rule seems to no longer work in China. Because, when China is cheering for economic growth, it finds that the unemployment rate is also growing.