On The Transition Period Of China's Financial Risks And Control Measures

A lot of countries have paid much attention on the prevention and control of financial risk after the crisis in 1998. NASDAQ has declined badly at the end of year 2000 and some predicted that the new worldwide crisis is coming. But the increasing rate of our economy for the first half year of 2001 is around 8%, which is much higher than the average level of the worldwide.One country's economy status will surely influence other countries especially for the economy giant as the United States. But every country has its own specific environment and the reflection to the same stimulation must have slight difference.China is a special country, which is suffering from the planned economy to market economy. It has mixed characteristic. Its prevention and control of financial crisis also has its own specialty. How to find it accurately is the main point of this thesis.The thesis is divided into 4 chapters. The first is "what", it shows the result of financial disorder. The second is "why"; it unveils what makes the crisis to be applied. The third and fourth chapter answers the question "what we should do"; I have lodged some personal ideas about the proper manners used in dealing with the crisis.As a typical country transferring from one economy to another type, China suffers from the "fly-off rainbow", we think that the cost in our country is pretty low, and the profit potential is accordingly huge. In fact, along with the development of the society, the cost in our country is mounting up, when the real profit is lower than the expected one, the crisis may be resulted by the refund difficulties of deb. What's more, the fixed exchange rate system also promotes the possibility of crisis, especially when it was applied with the high interest.Due to the above mentioned reasons, I think the key point to prevent financial tumble is to promote the independence of Central Bank, and, at the same time, to set up a high efficient system of supervising institutes.The fact is clear that the financial chaos could destroy the banking system heavily,although we didn't get involved in the previous Asian crisis, we shouldn't ignore theserious problems in our banking system. I hope more research would be done on thissubject.Because of the limitation of my professional knowledge, there must be some mistakesin this thesis; it would be greatly appreciated if the professors could pick them out forme.At last, I want to extend my most sincere thanks to my dearest professor: Mr. Zhao. He has helped me from choosing the topic to the order of every chapter. His seriousattitude affects greatly.Thank you, Mr.Zhao.