Editorial

Citation

(2013), "Editorial", China Finance Review International, Vol. 3 No. 2. https://doi.org/10.1108/cfri.2013.52503baa.001

Editorial

Article Type: Editorial From: China Finance Review International, Volume 3, Issue 2

With the advent of spring, many changes have been quietly happened to China’s economy and society. After the 18th National Congress of the Communist Party of China, the party and government completed the transfer of power to the new leading group smoothly. The new leadership has brought a lot of new atmosphere, and also brings many expectations to the people. Right after taking office as the General Secretary of the Central Committee of the Communist Party of China, Xi Jinping made an impassioned and emotional speech at the first press conference. The issue of people’s livelihood is mentioned many times in his speech, and he reiterated the ultimate goal to reach the revenue growth of people by deepening the reform.

Undoubtedly, the growth of people’s income and happiness index results from the reforms meeting the needs of economic and social development. As the core of an economy, the financial system and financial markets are in need of reform and development. On the one hand, the well functioning financial system and financial markets could allocate resources more efficiently, and the more sustainable economic growth is thus expected. On the other hand, people have always been eager to share the fruit of economic growth by participating in the financial markets, although risks and opportunities coexist in such emerging market of China.

Financial innovations provided people with a solution to get a higher investment return or to bear lower risks. More and more financial innovations and financial products appear in the Chinese financial markets. Not only those standardized financial derivatives which have been very popular in mature international markets are being traded actively in exchanges of China, such as commodity futures, stock index futures, warrants and convertible bonds, but also there have been many over-the-counter non-standardized financial derivatives, such as the large variety of structured financial products launched by the China’s commercial banks. These products allow the residents to have more investment options in order to create and manage their wealth.

However, facing a new type of financial derivatives, people also need more knowledge and understanding. Some investors suffered unexpected huge losses because they lack the necessary understanding of financial derivatives. In current selected five articles, except for one article on the impact of external seats in the board of directors on the corporate performance, the rest of articles mainly focus on the financial asset allocation and trading strategies, as well as the pricing of financial derivatives. We believe these articles will help readers to better understand those financial derivatives that are gradually entering into their life, and set up a bridge between the theoretical and the practical.