Free Essay on Financial and Accounting Market in China

China has recently achieved a significant level of ascendency in the context of economic progress, which has generated positive financial implications besides complex challenges regarding financial stability. With the rapid economic growth has come the considerable expansion of financial and accounting markets in China. Subsequently, this has contributed significantly towards the transformation of its economic savings to achieve a highly growth-inducing and productive investment. According to Allen, Gu and Qian (2015), China is a country in financial stability us rapidly gaining focus in economic policymaking, which further prompts the analysis of demand for financial security. However, the use of macroeconomic models has been suggested to be a better alternative for policy analysis in this context. Topfer (2018) argued that the macroeconomic model serves as an analytical tool, which are designed to help in describing the economic operation of a region or a country. Their application has a different application; therefore, there is the need to make informed choices on the most appropriate type and approach. Researchers have revealed that there is a significant interconnection between the analyses based on the macroeconomic models in understanding financial stability, and this will be applicable in the context of China's financial and accounting market. This justifies the need to conduct a case study of the business and accounting market in China.

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Research Questions

1. How has China achieved rapid financial stability?
2. What are the implications of the current financial system in China?
3. How applicable is the macroeconomics model in China's context?
4. How will the application of the macroeconomics model affect the analysis ultimately?
5. Research Objectives and Statement of Problem
6. To determine how China has achieved rapid financial stability
7. To identify the implications of the current economic system in China
8. To investigate how applicable the macroeconomics model is in China's context?
9. To demonstrate how the application of the macroeconomics model will affect the analysis ultimately

The researcher has the task of meeting the stated objectives with the focus of finally addressing the research questions. As a result, the exercise will help investigate the primary research problem; what are the issues associated with the financial and Accounting Market in China?

Literature Review

Issues associated with China's Financial System

China has managed a significant level of financial stability, which has attracted the attention of the whole world. However, there are serious issues, which are worth evaluating to determine the implications for the financial and accounting market (Sun, 2018). The country is currently experiencing high leverage and rising housing prices, causing widespread concern regarding instability and risks of business economics. Subsequently, the country has been taking debts, which has recently been increased to above 20 million U.S. Dollars. Song and Xiong (2018) felt that the condition is currently growing worse, and the situation can be traced with the tremendous appreciation of housing prices. Ping He (2012) added that he prices rose by 10% averagely across the three levels of cities in the country. The economic system of the country is now prompted to establish strict measures for cooling down housing markets. As a result, as much as the nation strives to achieve its financial stability, the consumer index emerges

Applicability of the Macroeconomics Model in China's Context

The nature of the business and accounting market in China call for the application of an appropriate analytical tool, which will ultimately help in evaluating her financial economics and the associated implications. According to Gruin and Knaack (2019), China is fast moving towards a more comprehensive macro-commercial approach concerning the mission of financial stability. This is based on the need to learn from the reform experiences of the other country economies adopt the modern and international commercial standards applicable to particularly to China's circumstances. Based on the situation, the country is conscious of financial stability and risk surveillance up to the technical level, which is impressively growing.

Consequently, there is a need to attain an institutional change concerning the targeted regulatory setup. Based on the situation and the desired status, Allen, Qian and Gu (2017) felt that the country is looking forward to being using some of the most effective tools for addressing the financial risks like reserve requirements, dynamic provisioning, variable capital requirements and standards associated with financial exercises. This justifies the need for the application of macroeconomics model, which has the potential of helping to monitor China's progress of reforms (Allen, Gu & Qian, 2015). This will further help in the understanding of the key challenges concerning the situation at hand, which will enable mitigate the problems connected to capacity, interagency, and collaboration resources. As a result, the country will be able to monitor its financial stability for further integration of findings in the other policy areas.

Probable Implications of the Application of the Macroeconomic Model

In spite of the potential of the conventional macroeconomic analysis in accomplishing the study of the economic system of a country, there are possible implications which require appropriate adjustments. For instance, the method is based on the dangerous assumption that data revisions are random and small, therefore have little to no effect on the economic policy, modeling, or forecasting (Croushore, 2011). Recent studies of the U.S. on the macroeconomic data have, however, suggested that revisions are significant despite the notion, which encourages their assumptions. It, therefore, follows that more attention on the macroeconomics model data revision can be a critical intervention.

Significance of the Study

The accomplishment of the case study will be significant in several ways and will ultimately contribute significantly to knowledge. For one, other countries will learn from the economic experiences of China to improve their accounting systems to achieve an economy with financial stability (Womack, 2017). In the course of studying the economic approaches in the country, it will be known to other parts of the world why China has been able to make such rapid progress to chive the given level of economic stability. Besides, Min et al. (2018) provided that the economy of China will be adjusted based on the associated findings to help solve the currently experienced problems. Li (2014) argued that the study will also be relevant to the field of research; for instance, the researcher will understand the implication of applying the chosen analytical tool. Hachem (2018) suggested that they will also be able to determine and inform society regarding the best assessment approach. This will be very important in informing the community concerning the aspects of the financial system in China.

Research Methodology

The research will be employing the mixed-method for the collection and analysis of data being a compressive method, which will incorporate the aspects of both qualitative and qualitative approaches (Amaratunga et al., 2002). Pathipati and Taleghani (2016) noted that this will be very important since a single process may limit the researcher against achieving some critical elements of research. For instance, the use of quantitative data alone may not be applicable in gathering the data on the thoughts of the respondents (Qu & Dumay, 2011). As a result, the researcher will bridge the associated gap by introducing the quantitative aspects. The researcher will use the interview for qualitative data collection based on its suitability for the purpose. For instance, the researcher will have direct interaction with the respondents hence will be able to assess their honesty. Rowley (2014) argued that for the quantitative data, the study will utilize a survey to get statistical facts. The survey questions will be made flexible for adjustments according to the ability of respondents.

References

Allen, F., Gu, X., & Qian, J. (2015). China's Financial System: Growth and Risks. Foundations And Trends In Finance, 9(3-4), 197-319. DOI: 10.1561/0500000029

Allen, F., Qian, J., & Gu, X. (2017). An Overview of China's Financial System. Annual Review Of Financial Economics, 9(1), 191-231. DOI: 10.1146/annual-financial-112116-025652

Amaratunga, D., Baldry, D., Sarshar, M., & Newton, R. (2002). Quantitative and qualitative research in the built environment: application of "mixed" research approach. Work Study, 51(1), 17-31. DOI: 10.1108/00438020210415488

Gruin, J., & Knaack, P. (2019). Not Just Another Shadow Bank: Chinese Authoritarian Capitalism and the 'Developmental' Promise of Digital Financial Innovation. New Political Economy, 1-18. DOI: 10.1080/13563467.2018.1562437

Hachem, K. (2018). Shadow Banking in China. Annual Review Of Financial Economics, 10(1), 287-308. DOI: 10.1146/annurev-financial-110217-023025

Li, T. (2014). Shadow banking in China: expanding scale, evolving structure. Journal Of Financial Economic Policy, 6(3), 198-211. DOI: 10.1108/jfep-11-2013-0061

Min, Z., Weidong, C., Jingtong, Z., Xinzhe, G., & Qiyue, X. (2018). The development of China's financial system: a global perspective. China Economic Journal, 11(1), 25-43. DOI: 10.1080/17538963.2018.1411057

Pathipati, A., & Taleghani, N. (2016). Research in Medical School: A Survey Evaluating Why Medical Students Take Research Years. Cureus. DOI: 10.7759/cureus.741

Ping He, W. (2012). Banking regulation in China: what, why, and how?. Journal Of Financial Regulation And Compliance, 20(4), 367-384. DOI: 10.1108/13581981211279336

Qu, S., & Dumay, J. (2011). The qualitative research interview. Qualitative Research In Accounting & Management, 8(3), 238-264. DOI: 10.1108/11766091111162070

Qu, S., & Dumay, J. (2011). The qualitative research interview. Qualitative Research In Accounting & Management, 8(3), 238-264. DOI: 10.1108/11766091111162070

Rowley, J. (2014). Designing and using research questionnaires. Management Research Review, 37(3), 308-330. DOI: 10.1108/mrr-02-2013-0027

Song, Z., & Xiong, W. (2018). Risks in China's Financial System. Annual Review Of Financial Economics, 10(1), 261-286. DOI: 10.1146/annurev-financial-110716-032402

Sun, L. (2018). The structure and sustainability of China's debt. Cambridge Journal Of Economics, 43(3), 695-715. DOI: 10.1093/cje/bey030

Topfer, L. (2018). China's integration into the global financial system. Dialogues In Human Geography, 8(3), 251-271. DOI: 10.1177/2043820618797460

Womack, B. (2017). OUP accepted manuscript. The Chinese Journal Of International Politics. DOI: 10.1093/cjip/pox015