The Chinese Financial System and China’s Role in the Financial World

Abstract

Since the re-opening of the Chinese stock markets in late 1990, it has since developed into a vibrant market with more than twelve trillion USD total market capitalization in 2020, second only to the U.S. Despite the rapid development in the market size, however, information transparency, the rule of laws, market regulations, market efficiency, and institutional discipline remain to be less desirable. To be sure, market frictions also provide researchers ample opportunities to discover the behaviour of market participants, and the findings serve as a mirror for other emerging markets. With that in mind, in this special issue we have collected five papers that study the effect of media on the market expectations, earnings manipulation in a corporate acquisition event, insider’s trading in the fraudulent stock repurchase program, market inefficiency that results in significant arbitrage profit in the Treasury futures markets, and the relation between investor’s inattention and corporate earnings announcement effect.