Market Economy Honesty Factor Analysis And The Construction Of Ways To Explore

The author traces the history of credibility issue, defines corporate credibility and its influences on economic and social studies, summarizes and analysis problems China faces in the construction of credibility, and then advances suggestions on the construction of sound credibility.Credibility is honored as one of the basic moral principals in history. From an economics perspective, credibility is an asset, individual and entity can always do business more efficiently and smoothly if he and the company have a satisfactory credibility record. Credibility can help promote co-operation among concerned parties defined in the Game Theory. From a social perspective, credibility can help lower business costs as the party that is unable to obtain enough information will not be hurt if other involved parties are credit worthy. On a more macro perspective, the improvement in credibility, which is a measure of moral standard of the entire society, will help stimulate economic growth and create a more harmonious and stable society.But why does credibility baffle China's society and economy? China is now transiting from a planned economy to a market-driven economy, the influence of old cultures which are mainly initiated by Confucius(孔子), as well as established ideology and beliefs are either weakening or collapsing, while the new widely accepted moral standards have not been well-established, so credibility problems emerge. Besides, the planned economy China adopted before the reform not only restrains economic growth, but also leaves behind problems such as undefined property ownership, ill-defined government roles to promote economy, as well as mal-relations between central government and local governments, monopoly in industry and/or administration, weak legal structure and ineffective legal practice. In summary, credibility problems occur in China as the economy cannot be fully driven by market force, so cheating parties will not be punished or even can get returns from cheating, while parties with good will cannot be honored or obtain revenues, business sentiment and expectations are thus dampened.Why a sound credibility can be established? We can conclude from the above analysis that credibility is an important base for sustainable development of market economy. Socialist market economy differs itself from market economies in western countries as individuals and/or entities are treated equally, and the economy is drivenby combined forces from both the market and the government. People's unanimous on the importance and construction of credibility is another positive factor. Three mistakes people could make in the construction on credibility:1) Some may mistakenly argue that morality could be improved in line with economic growth, but economic logic do not work for morality;2) Some may advocate to re-implement traditional moral standards, including the altruism, to regulate corporate and/or personal actions in market economy;3) Some may think that China's socialist market economy is nothing different from market economy adopted by western countries except for the name.Suggestions on the construction of credibility in socialist market economy:1) Establish a new culture that is helpful for the development of socialist market economy.2) Update moral standards, transferring from altruism to egoism on condition that the behavior does not hurt others' interest.3) Revise and update laws and/or regulations, strengthen supervision and administration, as well as standardize the operation of agencies or other service institutions.4) People should be further educated to foster the sense of credibility. The government should be the model of credibility.5) Enhance entrepreneurship education, and create an encouraging environment for highly educated and trustworthy entrepreneurs.Credibility construction is a long-term project, and cannot be achieved overnight.