Editorial
Article Type: Editorial From: China Finance Review International, Volume 4, Issue 2.
On January 22, 2014, China's leading group for overall reform convened its first meeting, which shows reform is no doubt a hot word in China in 2014. The whole world pays close attention to China's reform, including the reform in the finance sector. The RMB internationalization and its exchange rate marketization, interest rate liberalization and its effect on the corporate financing and IPO reform in the stock market are all expected to move forward.
The five papers in this issue discuss above financial reform topics in a timely manner. The first paper entitled “The conditions and potential of RMB as an international reserve currency − the empirical evidences from the history of eight major international reserve currencies” aims at RMB internationalization, which investigates the determinants and the potential of RMB as an international reserve currency. It forecasts that international role of RMB could surpass that of the Japanese yen and the British pound,and get close to euro in the coming 15 years. In addition, the authority needs to take the effect of financial reform on corporate operation when implementing reform. The paper entitled “Earnings management and listing regulations in China” focus on firms’earning management when they face listing regulation in China stock market, which indicates that IPO reform has also a considerable impact on China financial markets. The paper entitled “How loan interest rate liberalization affects firms’ loan maturity structure: evidence from listed manufacturing companies in China” discusses the effect of interest rate liberalization on corporate financing. This paper helps us to understand another ongoing financial reform, i.e. interest rate liberalization at firm level. The remaining two papers entitled “Liquidity premium and the Corwin-Schultz bid-ask spread estimate” and “Ownership structure, stock volatility and analyst independence: evidence from China” investigate the stock market liquidity and volatility issue. Overall, all five papers in this issue provide valuable insights to ongoing substantial reforms in China financial sector.
Wenfeng Wu
