Developing financial systems to support sustainable growth in China

11 Nov 2016 01:57 PM

The ESRC and National Natural Science Foundation of China (NSFC) are pleased to announce nine new collaborative research projects that seek to develop and deepen our understanding of the Chinese financial system and its crucial role in supporting the future development and continued growth of the Chinese economy.

The projects, all of which involve close collaboration between UK and Chinese researchers, cover a broad range of issues but seek to answer fundamental questions regarding the relationship between the domestic financial system and economic growth in China: how does the financial system need to be developed and reformed if growth is to be sustained?; how can China manage the associated risks as financial markets become more sophisticated?; how can the financial system be developed in a way that ensures access to finance for the poor and how can the potential of new technology and new business models in financial services ('fintech') be best harnessed in the interests of innovation and growth?

Speaking on behalf of the NSFC, Yang Liexun, Director of Deptartment of Management Sciences, said: "Through deepening development of UK-China bilateral research into financial risk management, both sides have come together to improve academic understanding and communication, from promoting financial development and economic growth to developing perspectives on financial management, institution building, internet finance management and risk monitoring and controls."

Speaking on behalf of the ESRC, Dr Paul Sanderson, Deputy Team Head for the Economic Performance and Environment team, said: "The development of China's financial system will be of vital importance in facilitating continued growth of the wider economy as it enters a more mature phase. We are delighted to have had the opportunity to work with the NSFC in bringing together academic expertise in the UK and China to improve common understanding of this important area."

The projects are:

• Informal finance in China: Risks, potential and transformation
  UK principal investigator - Professor Simon Deakin, University of Cambridge
  China principal investigator - Professor Qiang Zhang, University of Hunan 
• Nudging towards a better financial future: applying behavioural insights in the development of financial systems in rural China
  UK principal investigator - Dr Helen Bao, University of Cambridge
  China principal investigator - Professor Jinming Yan, Renmin University
• Boosting growth through strengthening investor and creditor protection in China: How China can learn from the UK experience
  UK principal investigator - Professor Gerard McCormack, University of Leeds
  China principal investigator - Professor Xian Huang, Wuhan University
• China's international financial integration - impact on financial development and stability
  UK principal investigator - Professor Keyu Jin, LSE
  China principal investigator - Professor Chong-en Bai, Tsinghua University
• Building debt capital markets in China
  UK principal investigator - Professor Ronald Anderson, LSE
  China principal investigator - Professor Xuebin Chen, Fudan University
• Peer-to-peer lending market in China: pricing, risk management and regulation
  UK principal investigator - Professor Mustafa Caglayan, Heriot-Watt University
  China principal investigator - Professor Wei Zhang, Tianjin University
• The role of innovation, diversity and financial regulation
  UK principal investigator - Professor Gerhard Kling, School of Oriental & African Studies
  China principal investigator - Professor Lihui Tian, Nankai University
• The financialisation of urban development and associated financial risks in China
  UK principal investigator - Professor Fulong Wu, University College London
  China principal investigator - Professor Jie Chen, Shanghai University of Finance and Economics
• Shadow banking and the Chinese economy: A micro to macro modelling framework
  UK principal investigator - Professor Kent Matthews, Cardiff University
  China principal investigator - Dr Zhiguo Xiao, Fudan University

Part of the Newton Fund – a £375 million fund provided to the Research Councils as part of the UK's Official Development Assistance (ODA) commitment to develop science and innovation partnerships that promote the economic development and welfare of developing countries – £2.7 million ESRC funding in addition to 18 million RMB (equivalent to approximately £2 million) from NSFC makes this the largest co-funded Newton activity between these two funders.