Abstract：During 2000—2010, the national balancesheet of China demonstrated a rapid expansion. The accumulation of external wealth, infrastructure and housing assets constitutes the dominant drivers of assets expansion, which recorded the historical process of the structural change of industrialization under exportled strategy and the accelerating urbanization. The liability expansion of all levels of government and SOEs, which overtakes the private sector, indicates the institutional feature of government dominance in China’s economic activities. Further analysis on the risk assessment of sovereign balance sheet shows: (1) Generally, China’s sovereign equity is positive thus there’s almost no possibility for China to have a sovereign debt crisis. (2) the shortterm sovereign balance sheet risk is housing credit and local government debt, while the medium to long run risk is concentrated in external balance sheet, corporate debt and social security account. These risks are mostly contingent liabilities and closely related to the traditional development model. (3)the simulation of debt dynamics shows maintaining the difference between GDP growth rate and interest rate is crucial for debt liquidation. Therefore, transforming the development model and sustaining economic growth are the fundamental approaches to cope with sovereign debt risk.
Key Words：Balancesheet Expansion; Contingent Liability Risk; Transformation of Development Model; Sustainable Growth

Abstract：This paper establishes an endogenouscredit financial business cycle model, to study how different monetary policies and economic fluctuations affect financial aggregate variables， economic aggregate variables，and monetary multiplier. By comparative static analysis, we find that depositreserve ratio is countercyclical. By dynamic analysis， this paper shows that monetary innovation and the increase of depositreserve ratio cancel each other out. This paper fits the model to China data, and finds that the policies simply adjusting depositreserve ratio can not smooth the fluctuations，instead of being the cause of the instability of credit market. The model also predicts the activities of financial sectors greatly affect the economy,  and the suitable combination of monetary policies and depositreserve ratio polices can stable the economy.This explains the procyclical feature of the monetary innovation and the change of the depositreserve ratio. The empirical analysis shows the key features of the model fits the facts of real economy well.
Key Words：Interest Rate; Ratio of Deposits; Endogenous Credit; Dynamic of Business Cycle

Abstract：This paper constructs an economic growth model with three sectors such as agriculture, manufacturing and services, and studies the process of structural change from a preference perspective. This paper regards preference structure change as an endogenous behavior of agents’ independent decision. The change of subsistence consumption in agriculture depends primarily on agricultural income and agricultural labor input, and the change of selfprovision of services depends primarily on services income and the technological complexity in services. Endogenous preference structural change induces consumption structural change and production structural change, which forms a comprehensive picture of economic structure change. This paper characterizes sectoral balanced growth path (SBGP) and aggregate balanced growth path (ABGP), and analyzes the character of sectoral structural change. It also analyzes the nature of aggregate economic growth combining with generalized balanced growth path (GBGP), and combines economic growth theory and structure change theory ingeniously.
Key Words：Nonhomothetic Preference; Endogenous Preference Structure; Structural Change; ABGP; SBGP

Abstract：The duration of trade relationships has been introduced to study trade dynamics in a new perspective. Based on the matching data of China’s customs database and Chinese industrial enterprise database during 2000—2005, the study finds that average duration of Chinese exporter is less than 2 years and median one is 3 years. Besides, the hazard rate of trade relationship has prominent negative duration dependence. We further use discrete time duration model to analyze determinants of trade relationship and reach the conclusion that the influences of variables in gravity model on the duration of export are consistent with those on the trade flows, which means that firmlevel characteristics have remarkable influences on trade relationship. At the same time, there exist significant differences in regional and ownership influences on trade duration. Therefore, we suggest that China should establish an effective warning system, deepen existing trade relationship and carry out appropriate trade policies in order to keep stable and continuous export development.
Key Words：Duration of Trade Relationship; Cox Model; Negative Duration Dependence; Discrete Time Duration Model

Abstract：This paper combines generalized Malmquist index and stochastic frontier model to measure production efficiency, TFP growth and their changes in China over the period from 1995 to 2009 while accounting for factors about environment. The results show that environmental production efficiency can reflect efficiency losses brought by environmental problems and can better display the resource use efficiency differences between provinces. The environmental TFP is usually greater than traditional TFP during the study period, as is closely related to the effectiveness of energy saving and emission reduction in these times. However, due to the fast capital deepening, the contributions to China’s economic growth in both environmental TFP and traditional TFP are not high, and it also causes some problems such as implosion of the provinciallevel technological frontier and increasing difficulty in emission reduction.
Key Words：Environmental Production Efficiency; Environmental Total Factor Productivity; Generalized Malmquist Index; Stochastic Frontier Analysis

Abstract：Using the China Urban Resident Basic Medical Insurance Annual Survey(URBMI), this paper analyzes the effects of URBMI on household consumption in urban China. The DifferenceinDifferences estimates show that participating families would increase their annual nonmedical consumption by about 13%. However, their medical expenditures remain unchanged. When nonmedical expenditures are separated into subcategories, the effect of URBMI is most statistically significant for daily and other expenditure, followed by changes in educational expenditures. In addition, URBMI increases the nonmedical consumption of lowincome families by 202%, mid income families by 126%, and has no effect on highincome families.
Key Words：Urban Residents Basic Medical Insurance; Precautionary Saving; Consumption

Abstract：The study on citizens’ satisfaction with public services helps evaluation the efficiency of fiscal system for public service provision and the performance of local governments. Taking primary education and medical service as study cases, this paper examines the impact of countylevel fiscal autonomy on citizens’ satisfaction with public services in China. Results find that: (1) Local fiscal autonomy has a significant effect to promote the level of citizens’ satisfaction with public services. This is achieved by efficiency gains of public input, rather than increasing absolute level or share of the related expenditures; (2) There is betweenjurisdiction heterogeneity effect that fiscal autonomy produces a stronger influence on poorer counties. According to the evidence, by introducing citizens’ satisfaction with public services and being given ample revenue autonomous authority, local governments can improve the efficiency in the provision of public services, and the reform is more necessary in poorer regions.
Key Words：Satisfaction with Public Services; Fiscal Autonomy;  Primary Education; Medical Service

Abstract：Based on the theory of information economics, this paper sets up a mathematical model to analyze a new credit pattern in China that allows SMEs to get access to bank loans through E-commerce. In traditional credit patterns, credit rationing of SMEs occurs due to asymmetric information, since the contract consisting of collaterals and interest rate can not fully screen different types of SMEs. The introduction of E-commerce solves this problem under certain conditions, since it is able to increase firms’ default cost, alleviate information asymmetry and enhance risk sharing. It is proved that low risk SMEs that are rationed from financing in traditional credit patterns are capable of obtaining bank loans when E-commerce is present. Comparative statics concerning the features of E-commerce are conducted and policy implications are put forward based on the model. This paper lays the microeconomic foundation for the effects of E-commerce on the improvement of SMEs’ financing in China.
Key Words：E-commerce; Credit Rationing; SMEs’ Financing; Asymmetric Information; Default Cost

Abstract：Based on financing constrained theory, this paper tests the effect of environment uncertainty on the investment efficiency. Results show that environment uncertainty is positively related with investment deviation. The stateowned companies are associated with underinvestment, while the nonstateowned companies are associated with overinvestment. Further studies show that in nonstateowned companies, investment deviation induced by environment uncertainty will improve firm value, while in stateowned companies, it will lower firm value. This paper demonstrates that the degree of investment deviation is not mean lower investment efficiency when estimated by ignoring the effect of investment constraint. Furthermore, because the investment constraint and management incentive are different between stateowned companies and nonstateowned companies, they adopt different distinct investment policies to cope with environment uncertainty.
Key Words：Environment Uncertainty; Stateowned; Investment Efficiency; Firm Value

Abstract：Stock price crash risk is a hot issue in finance research. Using a sample of Ashare listed firms in China for the period 2003—2010, this paper investigates the relationship between analyst optimism and stock price crash risk at firm level, and how conflicts of interest affect this relationship. We provide strong evidence that analyst optimism is positively associated with stock price crash risk. And, this relation is more pronounced in the bull market. Moreover, Results show that the impact of analyst optimism on crash risk is more pronounced when institutional ownership is higher, the number of institutional investors is larger, there is seasoned equity offering and debt issuing, and the ratio of analysts from brokerage firms with high brokerage commissions is higher. These results indicate that conflicts of interest in sellside research do affect this relation. Our paper contributes to the literature on stock price crash risk, and has important implications for our understanding the role of analysts and the development of capital market in China.
Key Words：Analyst Optimism; Conflicts of Interest; Stock Price Crash Risk

Abstract：This paper applies “the spiral of silence”, one theory of media effect research in communication, to study the possible negative impact the media coverage may have on the financial markets. With the use of text content analysis, this paper develops a comprehensive index to measure media sentiment from three dimensions: tone, exposure and attention. On that basis, this paper makes deep research on the relationship between media sentiment and asset mispricing. The results show that high or low media sentiment is positively associated with stock mispricing. In addition, the lower transparent the listed firms are, the more significant effects media sentiment has on stock mispricing. The further evidence indicates that the effects of the media sentiment are asymmetric. Specifically, optimistic media sentiment is more likely to push price to deviate from fundamental value and thus lead to price bubbles.
Key Words：Media Sentiment; Asset Mispricing;  Spiral of Silence