A Study On The Corporate Credit And Regulation During The Transitional Period Of China's Economy And Society

Corporate credit is the inner need of the development of the market economy, the formation of which relies on the self-enforcement system and the third-party enforcement system. It will change its form to fit the development of the economy and society. During the transitional period of China's economy and society, the evolution of the corporate credit is shown as a process of social game. It has evolved through interacting with property right system, market system and hierarchy system(system of corporate management and system of government regulation). Private property right strengthens corporate's impetus of chasing long-range maximum profit, but property system itself was determined by credit system. Surrounded by vicious competition and monopoly, pluralization of the property right, non-impersonation of the measure of trade-off, and faultiness of the corporate administration structure and government regulation system, inauthentic behavior satisfied corporate or its agent's greed of maximizing long-range and short-range interest, and private property right probably will strengthen their impetus of chasing maximum profit. China has a history of planned economy, feudalism society and selection of the path of reform, which results in the path dependence on the government's trust, government regulation and ethic credit culture. Therefore, it's difficult for the contract credit to come into being so as to fit the development of market economy. In this condition, the rule of government becomes extremely critical. A market-augmenting government, other than a predatory government is the precondition for a government to perform its proper function. This precondition can only be realized by limiting the power of government, but it will also limit government's function as a third-party enforcement system. So administering the corporate credit during the transitional period should not only limit government's power, but also strengthen government's function as a third-part enforcement system, at the same time, cultivating the self-enforcement system of corporate credit. During the long-range period of evolution, the harmonic development of the three bodies will gradually be realized.