Abstract： Contemporary Chinese Marxist political economy refers to socialist political economy with Chinese characteristics. If defined by production relations, contemporary Chinese Marxist political economy is of political economy of the primary stage of socialism. If defined by production forces, it is of political economy of the middleincome stage. As the objects have extended to production forces, the task of socialist political economy with Chinese characteristics is constructing a systematic economic theory on liberation, development and protection of production forces. Systematic theories on the basic economic system and the basic income system, as the basic contents of socialist economic system, are the core contents of socialist political economy with Chinese characteristics. Chinas marketoriented reforms promote that research on political economy extends to economic operation. The establishment and evolution of the socialist market economy theory, demonstrate great achievements of socialist political economy with Chinese characteristics. The analysis of supplydemand relationship has turned to the respective analysis of demandside and supplyside reforms, which has expanded the traditional research into a new research field of socialist political economy with Chinese characteristics.
Key Words： Contemporary Chinese Marxist Political Economy; Socialist Political Economy with Chinese Characteristics; Socialist Economic Theory

Abstract： The Communist Party of China has innovated the theory of kaifangxing economy during the long period of China's openingup, which has been one important content of socialist political economy. The theory came from the heredity of Marxist optimal gene, is deeply rooted in the great practice of Chinese people, and has become a big theoretical tree owing to the hard work of the masses of Chinese researchers. The theory innovated Marist theories of world market and international division of labor, and innovated Mao Zedong's three worlds theory, and appeared as a theoretical summary of basic practice and experience during 35 years of China's opening up. Its convention includes: perfecting the system of kaifangxing economy with mutual benefit and winwin, multibalance, safety and high efficiency; building a newer system of kaifangxing economy; cultivating new advantage of participating in and leading international economic competition and cooperation; perfecting the strategic layout of openingup; involving actively in global economic governance and public goods provision. As an outline, this paper only raises a basic analytic framework, while a large number of issues require research and enrichment. While building and developing the theory of kaifangxing economy with Chinese characteristics, few lessons could be drawn from the western knowledge system of international economics, of which even fewer could be applied to China immediately. Therefore, Chinese economic scholars must have such a sense of mission and confidence that we should go our own way of building China's distinctive academic system and theoretical paradigm. However, it is indeed a long and arduous task to blaze a new way of theoretical development, which reflects development rules of socialist economy with Chinese characteristics, and typifies China's manners and spirits, under the western economic academic system's strong impacts on China's economic research.
Key Words： Chinese Characteristics; Theory of Kaifangxing Economy; Socialist Political Economy

Abstract： This thesis made in-depth analysis of the associated mechanism of the transformation of macro-policy and management of inflation expectation by the construction of dynamic stochastic general equilibrium model with the characteristic of China. The results show， the macro-policy of China shifted from the administrative-intervention-oriented regime to the marketoriented regime in 1998， which results in expectation trap before 1998 and the curb of inflation expectation in the short run after 1998，but because of the trade-off between anti-inflation and the stabilization of economic growth and the shift of main influencing channel of administrative intervention on economy which shift from the spillover effect on market-oriented tools to adverse selection effect on the basis of micro level of soft budget constraint， the transformation of macro-policy results in the mismatch between the stance of monetary policy and the state of credit supply which challenges the management of inflation expectation. According to the results， government should take the effective management of inflation expectation as an important prerequisite for macroeconomic regulation and control， further clarify the boundary of government and market and gradually get rid of highly dependence on administrative intervention in macropolicy.
Key Words： Policy Transformation; Inflation Expectation; Administrative Intervention; Dynamic Stochastic General Equilibrium Model

Abstract： This paper argues that the effectiveness of earmarked grants depends on the rules to distribute grants， assisting the weak or rewarding the good， and the stage of economic development. As economy grows， the rule of rewarding the good will be superior to the rule of assisting weak， which will result in more balanced public expenditure structure. Taking the rural compulsory education expenditure guarantee mechanism reform in 2006 as background， we test the interrelationship between earmarked education grant and local education expenditure using nonrecursive structural equation models with a sample of 423 counties in central China. The evidence indicates prevalence of the rule of rewarding the good， which leads to more local spending on education. This finding is of importance to build an equitable and efficient earmarked grants system.
Key Words： Earmarked Grants; Local Government Spending Behavior; Rural Compulsory Education Aid Program; Nonrecursive Structural Equation Models

Abstract： Using the patent applications data of A-share listed companies in SSE and SZSE from 2001 to 2010， we analyze the impact of Chinese industrial policy (CIP) on corporate innovation behavior and its internal mechanism. We find that the number of patent application increases significantly in those firms incented by CIP. However， this phenomenon occurs in the group of non-invention patent applications (NIPA)， which means that these firms pursued “innovation by numbers” and ignored “the quality of innovation”. When firms expect that they will obtain more subsidies and tax incentives， the number of their patent applications， especially the number of the NIPA increased significantly， which means that the support of CIP induced enterprise to innovate for “support seeking”. To further analyze these phenomenons above， we divide the firms into SOE group and non-SOE group， as well as high-tech industry group and non-high-tech industry group. The result of the further analysis is that these phenomenons above were significant in SOE group and non-high-tech industry group， which indicated that CIP could only inspire strategic innovation， and the firms innovate for “support seeking”， pursuing “innovation by numbers” instead of its quality. However， company's market value is improved as their invention patent applications increased. Only substantial innovation can promote enterprises development.
Key Words： Industrial Policy; Enterprise Innovation; Government Subsidy; Tax Incentives

Abstract： This paper focuses on the market distortions in the real economy. The empirical results show that bank financing has a significant positive effect on both cold and hot market distortions; that bank financing of state-owned， corporate， private and foreign enterprises can lead to cold market distortions， while that of collective， corporate， private and foreign enterprises contributes to hot market distortions， in which bank financing of state-owned enterprises has caused the most severe cold market distortions but strongly suppressed hot market distortions; and that both cold and hot market distortions hinder firm growth. We discover a problem of profit lost， which is an important economic problem in China's current situation. We also analyze the relationship between the virtual economy and the real economy. The conclusions of this paper can provide some empirical evidence for the impact of the virtual economy on the real economy， and initially reveal the realistic basis of profit lost.
Key Words： Cold Market Distortion; Hot Market Distortion; Profit Lost; Virtual Economy; Monetary Wealth

Abstract： China's foreign trade has shifted gear from the previous high-speed expansion to the medium-to-high speed rapid growth since the rising of the cost of domestic factors and the re-industrialization of the developed countries. It is worth to study that how to make trade and R&D policy to achieve the succeed transformation. We construct a theoretical model based on the vertical-related market and in the context of the lower technology level compared to the developed countries. We discuss the route and the condition of the realization trade structure transformation in China， we also discuss the choice of trade and R&D policy under certain economic. Our results show that， the implementation of R&D subsidy and export subsidy policy can achieve the balance of trade growth between the quality and quantity whatever China exporting or importing the intermediate input. We also find that， in order to realize the transformation and the upgrading of export structure and the steady growth of export quantity in the “new normal”， the key is the development driven by innovation.
Key Words： Transformation and Upgrading of Export Structure; R&D Subsidy; Export Subsidy

Abstract： The main contribution of this paper is to reveal how the difference in industrial structure between the home and the host country influences the effect of outward FDI (ODI) on export， and provide empirical evidence from “China-host Country” perspective. Theoretically， we obtain the conditions of substitution or creation effect of ODI on export based on four ODI basic types. Further， from the two directions of industrial structure changing， we document that with the widening of difference in industrial structure between the home country and the host country， the creating effect of ODI on export increases， regardless of the ODI types. Empirically， we use 108 host countries' panel data during 2003—2011 to find that China's ODI demonstrates export-creating effect， while the difference in industrial structure has negative impact; and with the increasing of the degree of difference in industry structure， ODI's creating effect on export increases. Our macro-level empirical evidence supports the theoretical analysis， and reflects robustness in different settings of samples， variables and econometric methods.
Key Words： Outward FDI; Industrial Structure; Export Effect; Comparative Advantage

Abstract： With the rapid development of economy， property income rises and there are considerable differences among classes， between urban and rural household. The impact of property income on total income inequality should not be ignored. This paper focuses on the impact of the internal structure of property income and household characteristics， using household level and provincial level data， and provides some useful references for narrowing the income gap. The result shows that among the property income sources， rent and investment income of financial assets play an important role in widening the property income gap， while interest income and insurance benefits can decrease it. And the differences between urban and rural areas， the regional differences， skill training level and the degree of risk preference are the main factors that influence the property income inequality. The policy to improving residents' property income should be more inclined to low-income groups. We should develop the economy and education level of poor area， guild them to participate in capital market， and improve the system of affordable housing. It is very important to control the excessive growth and structural imbalance of property income， therefore， making property income becomes the proper way for residents to raise living standards and share the achievements of development.
Key Words： Property Income; Gini Coefficient; Income Inequality

Abstract： Few literatures has studied the effect of manager on restricting the tunneling behavior. This paper classifies the managers into three types based on their independency， and builds up the models to theoretically and empirically analyze the effects of different manager's behaviors on tunneling and firm value. The results show that： the degree of tunneling is negatively correlated with manager's independency. The independent manager can restrict the tunneling behavior most effectively， and the second is dependent manager， while the integrated manager would encourage expropriation. Meanwhile， the manager's independency is negatively correlated with abnormal perks but is positively correlated with firm value; and the degree of tunneling and abnormal perks is positively correlated， which indicates the reason for different types of manager to take different actions in tunneling. Therefore， the manager's independency can be an effective corporate governance mechanism， which can restrict tunneling and improve firm value.
Key Words： Manager's Heterogeneity; Tunneling; Abnormal Perks; Firm Value

Abstract： Using a sample of Chinese listed firms which change the ultimate controlling shareholders between 2003 and 2011， we study the impact on firms' performance of four different types of transfer of control. We find： (1) a firm's performance increases significantly， if the transfer of its controlling rights is between two different types of entities (a state entity and a non-state private entity); however a firm's performance does not change， if the transfer of control is between two entities of the same type (state-state transfer or private-private transfer); (2) the reduction of tunneling effect from larger shareholders can explain the improvement of performance. Another reason for the improvement is the alleviation of agency problem， if a firm's control transfers from a state-entity to a private-entity， but not for the reversal transfer. These results imply that both types of property rights (state or private) have advantages and disadvantages. State entities may suffer more severe managerial agency problem， while the private entities may suffer more severe tunneling effect resulting from the control of large shareholders. The change in the type of property rights overcomes the shortcomings of the current type thereby leading to improved performance. Our findings are conducive to the Chinese policymakers， and help to reduce the debate of “guojinmintui” in China.
Key Words： Control Transfers; Privatization; Guojinmintui; Tunneling Effect; Agency Problem

Abstract： Due to innovation weakness and insufficient legitimacy， the origin and supply of start-up private firms' capital rely heavily on the trust and emotional connections among the capital providers. Compared with matured firms， start-up firms are more constrained by the incomplete formal institutions. Therefore informal institutions， culture， and traditions are especially important for the establishment and growth of start-up firms. Based on the data from “The Ninth Survey on Private Firms”， this study systematically investigates the main factors that influence the sources of start-up capital of private firms， from a religious perspective. We find that the stronger the religious tradition， the lower the percentage of capital contributed by the entrepreneurs， and the higher the percentage of capital contributed by the providers outside the family. We also find that firms setup by religious entrepreneurs attract more capital from family members， therefore lowers capital contributed by entrepreneurs per se. To conclude， religious tradition and religious belief influence the extent of trust among society and among individuals， and influence the extent of emotional connections among family members. This in turn alleviates the information and agency problems for the obtaining of private start-ups' capital.
Key Words： Religious Tradition; Religious Belief; Private Firms; The Sources of Start-up Capital

Abstract： Most of the research assumed that the food safety regulatory policy should be more string， which means that more institution supply would decrease the opportunity of food safety policy violation. This paper is based on the rational and limited rational of food safety decision making， using the method of simulation and find that： strengthen the regulatory power would have dual side impact on the food producers' policy violation behavior.In some situation， with the regulatory power enhancing， the food policy violation behavior would increase (the dilemma of regulation). In the meanwhile， the average revenue and the total revenue of industry would also decrease (the dilemma of food policy violation). As a result， this paper comes up with the theory of regulatory balance in food safety governance. Based on this theory， we concluded that food safety regulatory institution should transform from strengthen regulatory power only， to optimize the structural regulatory institution arrangement， which means that when regulatory resource was scarce， government should take the food producers， consumers and regulators into consideration. Government should adjust the regulatory power based on the producer revenue and consumer payment willingness， in return the different level of regulatory power would impact the producer revenue and consumer payment willingness.Finally the paper concludes that government should balance the regulatory power， producer revenue and consumer payment willingness， instead of strengthening the regulatory power.
Key Words： Food Safety; Dilemma of Regulation; Regulatory Boundedness; Institution Arrangement; Regulatory Balance