China's financial risk analysis

Abstract: Financial risk not only in the field of budget revenue and expenditure, economic and social problems in other areas may also be the final financial commitment by the government of its losses, therefore, its study is particularly important. This paper describes the financial risk and its manifestations on the basis of our present financial risks, analyzed the causes and propose preventive measures.

Keywords: Financial risk measures a, the definition of the concept of financial risk for the financial risks currently there is no generally accepted concept of a unified view of the World Bank and International Monetary Fund will be defined as future funding pressures facing the government, that government debt, including government borrowing and spending. China's scholars do not speak a situation is what is financial risk, an alternative explanation is derived from the concept of risk. to Dr. Liu Shangxi, for example, he said the financial risk can not provide sufficient financial means financial resources resulting in the normal operation of the state apparatus the possibility of losses, but also that the financial risk than the risk of the financial sector, but the entire state and government of the risk. This paper argues that financial risk is the possibility of financial loss occurring. Specifically, financial risks as well as its target, if there is less than its expected financial behavior of the target, giving the actors the possibility of loss. Here is the mainstay of the government fiscal behavior, financial behavior includes three levels: (1 ) financial system, (2) financial expectations, (3) fiscal policy. financial loss refers to financial behavior can not perform or can not perform its functions well lead to adverse consequences.
Second, at this stage of China's financial risks that (a) revenue risk analysis to measure the size of the revenue risk is an important indicator of revenue share of GDP, this indicator is currently China's very optimistic revenue in the gross domestic proportion of GDP is low and the risks are considerable, not only affect the normal functioning of state organs, but also result in a lack of support for social and economic development of China's long-term sustainable socio-economic development is extremely unfavorable.

(B) the expenditure risk analysis of financial expenditure proportion of GDP is a measure of the size of the expenditure is an important risk indicator. China's fiscal expenditure share of GDP has been declining. Expenditure is to be financial functions implementation, financial role to play in the media and carriers in the market economy, the scarcity of financial resources required expenditure efficiency. China's current situation is far from the efficiency of fiscal spending targets are still far away, a heavy burden of financial expenditure, expenditure structure is irrational , expenditure inefficiency is a serious problem.

(C) the fiscal deficit risk analysis. Deficit refers to the state revenue and expenditure compared to income support than the non-equilibrium state, which reflects the economic substance of the expenditure needs and revenue capacity of the gap between short-term, occasional, small-scale fiscal deficits often by a temporary burst of factors, usually through financial internal mechanism to digest, for financial security, the economy will not have much impact. and the deficit were to become regular, long-term, expanding financial phenomenon, the adverse consequences of its own over the financial capacity, it will directly affect the financial security and economic stability, to become a major financial risk in the external appearance.
Second, the causes of China's financial risk 1. Non-standardized government revenue and expenditure mechanisms: the budget fiscal risks arising root causes of the planned economy can be characterized roughly summarized from the following aspects: the finance revenue and expenditure, purchase and sale of agricultural products, prices and low wage plan in priority to industrial development of the historical background, the state by lowering the purchase price and low agricultural industrial sector wage system so that access to cheap raw materials and labor, reduce production costs.

2. Non-standard financial, banking, business relationships: a hidden cause of debt in non-standard relationship between the trinity of the Government's behavior in a key position, directly affect the behavior of banks and enterprises, between them is often 'a prosperity, a loss for both sides, 'any one of the main problems will affect other body, and ultimately the risk to be borne by the state.

3. Non-standard financial management system: the causes of local financial risk needs to be emphasized that this paper is the formulation of local financial risk refers primarily to the county, township are facing major financial difficulties in China, county and township finances are primary financial category. The current primary financial risk has reached a very serious extent, in some places is being evolved into the reality of the crisis.
Fourth, the financial risk against all financial risks have the potential, hidden, long-term, indirect, mixed, etc., a real risk of financial activities often depends on many factors, therefore, under normal circumstances people limited only in accordance with the theory and the accumulation of practical experience, to identify key factors and take appropriate preventive measures to avoid risks.

First, allow the Government to publish all types of financial risk faced.
Second, the financial risk factors into the ongoing budget process, so that the Government will direct expenses and indirect expenses (in fact the risk of spending) for comparison. Links to free download http://www.hi138. com
Third, the financial risks in advance control and management, the government in advance of the financial risk assessment and a pre-established financial risk borne by the government to the standards, for those who exceed the standard level of financial risk, the government will refuse to take the risk to the cost of policy.

Fourth, market-oriented management style, which the government can rely on market mechanisms, all or part of the financial risk onto the private units.

Fifth, the appropriate control of the size of the deficit, strengthen debt management to ensure the country's financial security and stable operation of the national economy.

It was particularly focus on research and development of the economic process of change in the law, not only for the purpose of the activities they have to choose a better way to achieve or relative path, but more importantly is the process of their activities in order to minimize risk and increase certainty in order to save costs and improve its value activities, but the current achievements, far from sufficient to make people aware of all risks, as Mises said: 'Science does not give us absolute and final certainty. It is only in our minds within its capabilities, the current state of scientific thinking, give us some kind of guarantee. the scientific system of knowledge is nothing more than the endless search for and access to progressive. 'Therefore, the economics of the financial risk of research can not be sufficient, it can only take on people's economic activities the various methods, the use of various means of limited scientific evaluation.


[1] Wen-Xiu Han, Liu and other potential proactive fiscal policy and sustainability [M]. Beijing: Economic Science Press, 2000
[2] Mafeng Ming, China's financial risk profile [J]. Beijing Technology and Business University (Social Science, 2007,7
[3] Cheng Yan, the theory of financial risk [J]. Shanxi College of Social Science, 2008,1 Links to free download

[DBNETLIB][ConnectionOpen (Connect()).]SQL Server 不存在或拒绝访问。

Related Research Papers on financial risk

China Financial Research