China’s Local Government Debts and Bond Market:Clarification and Policy Choice~

The surge in China＇s local government debt has made various sectors of society pay closer attention to the situation. First of all, four types of debt relations must be clarified： the relationship between asset and non-asset debt, the difference between long- term and short-term debt, the difference between debt in the form of bonds and debt in the form of bank loans, and the difference between debt listed in government budgets and other government debt. The development of long-term bonds is a fairly good choice for China to upgrade its consumption structure, accelerate urbanization, transform its economic development patterns, and meanwhile, to alleviate the mismatch between the financial powers of local governments and their administrative responsibilities.

Quality of Provisions for Bad Debts and Earnings Information Contents

We measure the quality of provisions for bad debts, based on both the cross-sectional and time-series basis. Empirical tests show the impacts on earnings information contents, as well as on the incremental information content of cash flows.

Facing Bad Debts:To Give Up or To Claim?

'The global financial tsunami of 2008 has affected all major export markets. The situation is much more severe than in previous crises.World trade is seriously affected as the credit crisis has led to an interruption in the normal

Grand Strategies for Dealing With Chinese Local Government Debts

Local governmental debts in China seem to be in a more precarious position than local government debts in the USA. The scale of Chinese local government debts far surpasses that of the USA. Further, Chinese local government debts appear to be expanding at an alarming rate in the past decade or so. This research focuses on grand strategies for dealing with Chinese local government debts. There are five research questions for this paper： 1） What is the size of the Chinese government debts？ 2） Are Chinese local government debts controllable？ 3） Who or what caused the rapid increase of the Chinese local government debts？ 4） Is it possible to have individual accountability for increasing local government debts in the future？ and 5） Will it be helpful to create a local government debt management organization in the Chinese central government？ Based on the available literature, this analysis also utilizes in death interviews with 13 government officials, policy analyst, and scholars. First, this paper identifies the size and categories of debts related to Chinese local governments. Then this paper illustrates various ways and methods of Chinese local governments to obtain leverage. After analyzing the causes and origins of these debts, the research demonstrates a potential local systematic risk. By contrast to its advantages and disadvantages, the paper suggests that the local governmental debts need to be constrained. It is important to restrict debt growth in terms of issuing, buying, repurchasing, collateralizing, etc. within a legal framework. With the consideration of political mechanisms in China, the research suggests that the central government establishes a specific organization to help normalize the local governmental debts with the function of supervision and management. The research also believes that it will be an effective way to control the growth of local debts if the central government can hold the relevant top leaders/officials of local governments to be accountable for their performances related to debt accumulation.

How to Offset Interior Debts in Consolidated Financial Statement for Reformed Group Enterprises

The content items to be offset of the reformed debt in consolidated financial statement of the operation occurred inside the group of enterprise is different from other general inner trades such as the sale of the stock or fixed asset, etc.. Through the reformed debt, the debtor and creditor have erased debt and credit on their bookkeeping. What to be offset are the capital reserve and the changed value of the asset. In this paper, the offsetting method of such items will be discussed.

An Empirical Study on the Determination and Coliection Rules for Marital Community Debts

In dealing with the problem of determining whether a debt should be a marital community debt and how such a debt should be collected,judges may have different value orientations regarding the tradeoff between the protection of marriage and family and the protection of the creditors,which needs to be studied based on empirical evidence.After the Judicial Interpretationss[2018]No.2(Fa Shi[2018]No.2)was enacted,we analyzed 863 judgments and motions of the Supreme People's Court of the People's Republic of China(PRC)and the high people's courts,and found that under the framework of existing normative regime,judges can still reach different valuejudgmentssbasedondifferent interpretative techniques.Judges differed in interpreting the terms of“common intent,”“family daily needs,”“common livelihood,”and1“joint production and operation,”and they applied various debt collection rules.These facts indicate that sometimes judges have a complex value balancing process in marginal cases,and they have made different value judgmenttthroughh extending or confining debt determination rules or debt collection rules.In some other cases,the different application of rules indicate that judges have interpreted those rules in a wrong way.By studying the judges'existing value orientations and how judges made their decisions,we can evaluate whether existing rules for determining and collecting marital community debts have balanced conflicting values properly,and such facts can also build further consensus for the development of rules.

A Functional Comparison of Marital Debts in Common Law Jurisdictions:Lessons from the Model Not Accepting the Common Property Regime

Traditionally,the Common Law System exercises a legal separation of marital property regime between husband and wife;this regime still has interpretation theory value for functional comparison to that of China.The husband-wife personality integration in the early days of the Common Law System goes back to the original agency of necessity similar to that of the daily family agency of the Civil Law System;the aim was to strengthen marital coherence rather than protect creditors.The“daily family needs”should beidentifiedwithoutexcluding the husband-and-wife separation period,and be based on the consumption level during the time that a couple have lived together.The current mainstream mode of the Common Law System starts from the“Consensual Approach”under the legal regime of separation of property between husband and wife,and limits the“Purpose Theory”to cases of insufficient consensual evidence.Moreover,thismainstream mode is supplemented by the“Presumption Theory”that only exists as a method of proof,and is similar to the current Chinese position of co-debt and co-signing.When a nondebtor consents a debtor to borrow money in the name of husband and wife,this consent can be used as a yardstick to determine their marital community debt and to identify the nature of various debts in the context of marital community debt.

“文化边缘人”视阈下A Debt to Dickens的态度系统研究

本文基于马丁评价理论下的态度系统,对赛珍珠的语篇A Debt to Dickens进行研究。赛珍珠“文化边缘人”的身份,给她的生活带来了很多不安和惆怅,前期在众多东方人面孔的乡村,村民对其异域特色的样貌有许多偏见,因此她多用负面的判断和鉴赏资源描述了一段孤独的生活;后期其寻找到小说的快乐后,沉迷于阅读的魅力,所以多用正面的判断和鉴赏资源写出了她的明朗。研究发现,全文的判断和鉴赏资源数量较多,情感资源出现较少。态度系统有利于分析文本所暗含的感情走向,给读者理解文本提供了一个新的视角。

Impact of carbon disclosure on debt financing costs

Creditors,such as banks,often use disclosed environmental information to assess a company’s environmental risk and ensure the safety of debt funds.Consequently,carbon disclosures have become an important consideration for creditors when making investments.This study explores the relationship between carbon disclosure and debt financing costs using data on listed companies from 2008 to 2019.The results show that carbon disclosure can reduce the debt financing costs of enterprises,and that this influence is more significant for private companies than for state-owned enterprises.Instrumental variables and Propensity Score Matching(PSM)were used to evaluate the robustness of negative relationships.Furthermore,carbon disclosure has a more significant impact on debt costs with less environmental supervision pressure,weak residents’environmental awareness,and weak product market competition.These findings provide guidance for companies’carbon information disclosure and support the establishment of official carbon disclosure standards.

State-Owned Capital Participation in Private Enterprises:A Perspective of Debt Financing

This study takes debt financing as the entry point and explores the impact of state-owned capital participation in private enterprises from the perspectives of“unarticulated rules”and“articulated rules”.The study finds that state-owned capital participation significantly reduces the debt financing costs of private enterprises and expands the scale of their debt financing.This conclusion remains valid after a series of endogeneity and robustness tests.Further analysis of the mechanism reveals that state-owned capital participation improves the debt financing of private enterprises through multiple channels:Enhancing their social reputation,mitigating the“statistical bias”they face,optimizing their information quality,and reducing the“shareholder-creditor”agency problems.This paper conceptualizes these benefits as the“complementary advantages of heterogeneous shareholders”.This not only constructs a theoretical framework for“reverse mixed-ownership reform”but also better narrates the Chinese story of“mixed-ownership reform”by adopting a more universally applicable theory of equity structure.Additionally,the paper supplements existing research on the macro-and meso-level relationship between the government and the market by exploring the government’s positive role at the micro-level.

The Exorbitant Privilege of US Treasuries and China's Choices in the New Era

After the decoupling of the US dollar from gold in 1971,US Treasuries replaced gold as the value benchmark of the international monetary system and acquired an exorbitant privilege.Subsequently,the total amount of US debt exhibited an exponential expansion trend,unbound by any substantial constraints.The so-called debt ceiling is a partisan game rather than a rigid fiscal constraint on the United States.As long as there are no fundamental changes in the global monetary system,the international credit of US Treasuries will stay stable,and their trend of infinite expansion will be sustained.Massive quantitative easing policies have failed to significantly shake this stability,and the notion of global investors offloading US Treasuries is more an illusion than a fact.The exorbitant privilege of US Treasuries grants its federal government the“freedom to borrow,”shielding the American financial sector from due penalties during global financial crises and securing excessive returns in global capital cycles.In the old days when running“twin surpluses”on capital and current accounts,China kept the value of Renminbi low to support its export manufacturing sector along the southeast coast.As a result,China accumulated huge foreign exchange reserves,mainly US Treasuries.Nowadays,this practice is no longer necessary,yielding low returns and posing significant security risks.

The Impact of Corporate Governance and Fair Value Accounting on Debt Contracts

This paper investigates the theoretical relationship between corporate governance,fair value accounting,and debt contracts.It primarily examines the individual impacts of corporate governance and fair value accounting on debt contracts,while also exploring the influence of corporate governance on fair value accounting.The study emphasizes the importance of considering the interests and legal status of creditors in the context of debt contracts.The findings indicate that strong corporate governance can reduce the likelihood of debt default and that the company’s restructuring costs in the event of a default determine whether improved corporate governance will increase or decrease debt costs.Additionally,the study reveals that the strength of corporate governance affects the value relevance of fair value accounting.However,the impact of fair value accounting on debt contracts is not inherently positive or negative;for instance,companies may use fair value adjustments with manipulative intent to enhance performance.Ultimately,the research highlights that discussions about corporate governance should not prioritize shareholder interests exclusively but also consider the legitimate position of creditors.

Digital Transformation and Corporate Financial Risk:Evidence from Listed Companies in

As a core issue in enterprise operation management,corporate financial risk is directly related to the survival and development of enterprises,and digital transformation has brought new challenges to the control of corporate financial risk.Based on the data of The Shanghai Stock Exchange(SSE)and Shenzhen Stock Exchange(SZSE)from 2009 to 2022,this paper analyzes the impact of digital transformation on corporate financial risk and the impact mechanism.The empirical study finds that digital transformation significantly increases the financial risk of enterprises,and shows differences among different regions,different risk factors,and enterprise natures,and substantially increases the corporate financial risk in the East and West,non-state-owned enterprises,high-risk and low-risk enterprises.The mechanism analysis found that digital transformation would affect the financial risk of enterprises by increasing their R&D investment and reducing their debt level.The conclusion improves insights and guidance for analyzing and managing financial risks in enterprises under digital transformation.

Debts and Downgrades

An analysis of the context of the U.S. debt ceiling debate helps put the crisis into perspective The months-long debt ceiling debate in the United States has affected the global financial market,and its impact may further spread to the real economy and even

Local Debts on a National Scale

Local governments’ reliance on borrowed money to spur economic development ignites worries Recently proposed Ministry of Finance measures to supervise the financing platforms of local governments and to regulate and avert risks in managing local debts have met with

Cyberattack Ramifications, The Hidden Cost of a Security Breach

In this in-depth exploration, I delve into the complex implications and costs of cybersecurity breaches. Venturing beyond just the immediate repercussions, the research unearths both the overt and concealed long-term consequences that businesses encounter. This study integrates findings from various research, including quantitative reports, drawing upon real-world incidents faced by both small and large enterprises. This investigation emphasizes the profound intangible costs, such as trade name devaluation and potential damage to brand reputation, which can persist long after the breach. By collating insights from industry experts and a myriad of research, the study provides a comprehensive perspective on the profound, multi-dimensional impacts of cybersecurity incidents. The overarching aim is to underscore the often-underestimated scope and depth of these breaches, emphasizing the entire timeline post-incident and the urgent need for fortified preventative and reactive measures in the digital domain.

Triggering economic growth to ensure financial stability:case study of Northern Cyprus

This study questions the importance of public debt in stable growth between 1980 and 2018,specifically,the Ricardian equivalence hypothesis and Keynesian view are questioned.This study used data obtained from the Northern Cyprus State Planning Office.A restricted vector autoregressive model is used to test the causal relationships between this model and public debt,government expenditure,total capital,consumption,investment,employment,net exports,exchange rate,and gross domestic product growth rate.To ensure financial stability,the variables that trigger economic growth through increased interactions were evaluated.Accordingly,unlike other studies,the Wald test results reveal that public debt does not have a direct effect on the gross national product but indirectly affects total capital,consumption,investment,and public expenditure,all of which influence real gross domestic product(RGDP).It has been observed that employment affects RGDP,consumption,government spending,and investment.There is also bidirectional causality between consumption,government spending,and RGDP.The estimates of the Ricardian equivalent hypothesis are important.However,today’s changing economic policies,declining real incomes,and consumer behavior in the face of ever-increasing inflation require that the theory be redesigned.Therefore,contrary to theoretical predictions,consumers are concerned about maintaining their standard of living rather than directing tax deductions to savings.Contrary to the claims of Keynesian researchers,no causal relationship is observed between public debt and growth in this study.However,public debt directly affects total capital,consumption,government spending,and investment,which are important for sustainable economic policy.

全球金融治理:赤字膨胀和必要改革

In recent years,due to the complex interplay of cyclical,structural,geopolitical,geoeconomic,and public health factors,the demand for global financial governance(GFG)has risen to new heights.The global foreign exchange market is undergoing disruptive adjustments;low-income countries are rapidly approaching a debt crisis;the gap in international development finance is widening;and the ongoing Ukraine crisis threatens to fragment and fracture the global economic and financial system.However,the current GFG system cannot address the above issues responsibly and effectively.This is largely because the system is a loose cooperation web based on soft laws instead of a closely integrated mechanism guided by hard rules.Reform on multiple fronts is required to improve the quality and relevance of GFG.This includes refocusing on key issues and ensuring that the system functions as a whole,prioritizing development,modernizing the international debt resolution framework,advancing the reform of international financial institutions,and thinking outside the box.Despite China’s late entry into the GFG system,it is an ardent advocator of international development cooperation,an active promoter of green finance,and a responsible participant in international efforts to address the debt crisis.With its Belt and Road Initiative,Global Security Initiative,Global Development Initiative,and unique path to modernization,China has offered the world an alternative development path while breathing new life into the old GFG system.

A Comparative Analysis of the Formation Path and Impact of Debt Risk in the US and Europe

Through the comparison of the sovereign debt risks of the two economies,this paper focuses on the analyses of the risk formation path and the fiscal sustainability at the macroeconomic level.Due to the differences in the external resources and coping measures that affect the risk formation of the two economies,as well as the differences in the institutional roots that lead to the rise of debt risks,the impact mechanism of sovereign debt risks is also different.Finally,theoretical and policy implications are given.

No-Arbitrage in Financial Economics: Solution of the Mystery of Implied Volatility and S&P 500 Volatility Index

We have shown that classic works of Modigliani and Miller, Black and Scholes, Merton, Black and Cox, and Leland making the foundation of the modern asset pricing theory, are wrong due to misinterpretation of no arbitrage as the martingale no-arbitrage principle. This error explains appearance of the geometric Brownian model (GBM) for description of the firm value and other long-term assets considering the firm and its assets as self-financing portfolios with symmetric return distributions. It contradicts the empirical observations that returns on firms, stocks, and bonds are skewed. On the other side, the settings of the asset valuation problems, taking into account the default line and business securing expenses, BSEs, generate skewed return distributions for the firm and its securities. The Extended Merton model (EMM), taking into account BSEs and the default line, shows that the no-arbitrage principle should be understood as the non-martingale no arbitrage, when for sufficiently long periods both the predictable part of returns and the mean of the stochastic part of returns occur negative, and the value of the return deficit depends on time and the states of the firm and market. The EMM findings explain the problems with the S&P 500 VIX, the strange behavior of variance and skewness of stock returns before and after the crisis of 1987, etc.