Part One Money and Economics

Chapter　1 Money　2
Learning　Objectives　2
Key　Topics　2
Section　1.1 What is Money 　2
1.1.1　History of money　2
1.1.2　Meaning of Money　4
Section　1.2 Functions of Money　5
1.2.1　Medium of Exchange　5
1.2.2　Unit of Account　6
1.2.3　Store of Value　7
1.2.4　Standard of Deferred Payment　8
Section　1.3 Evolution of the Payment System　8
1.3.1　The forms of money　8
1.3.2　Are we moving to a cashless society 　13
Section　1.4 Measuring Money　14
1.4.1　Theoretical and Empirical Definition of Money　15
1.4.2　The federal reserve’s monetary aggregates　15
1.4.3　Money supply　16
Section　1.5 Money Policy　18
Notes　20
Exercises　21
Additional　Readings　23
Chapter　2 Financial Markets　26
Learning　Objectives　26
Key　Topics　26
Section　2.1 What is Financial Market 　26
2.1.1　Definition of financial market　26
2.1.2　Constituents of financial market　27
Section　2.2 Functions of Financial Markets　28
2.2.1　Intermediary Functions　28
2.2.2　Financial Functions　29
Section　2.3Currency (Money) markets　29
2.3.1　Participants　30
2.3.2　Functions of the money market　31
2.3.3　Common money market instruments　32
Section　2.4 Capital markets　33
2.4.1　Deeply view to capital market　33
2.4.2　Examples of capital market transactions　34
2.4.3　Raising Capitals　36
Section　2.5 Derivative products market　38
2.5.1　Future Contracts　39
2.5.2　Forward Contracts　40
2.5.3　Optional contracts　41
Notes　42
Exercises　43
Additional　Readings　45
Chapter　3 Polities and Economics　47
Learning　Objectives　47
Key　Topics　47
Section　3.1 Macroeconomics & Polities　47
3.1.1　Games between policy makers and voters　48
3.1.2　Games between Policy Makers　50
Section　3.2 An General Perspective on the Political Economy of “Big Change”　51
3.2.1　The Social-Political Context and Co-Evolution　52
3.2.2　Embeddedness　52
3.2.3　The Dilemma of Knowledge as a Product and a Resource　53
3.2.4　The Global perspective on the evolution　53
3.2.5　Evolutionary Social-Economic “intricacy”　54
3.2.6　The Initiation of Self Re-Enforcing Growth　55
Section　3.3 Explosive Change of evolution and Communitarian Collective Ownership　55
3.3.1　The Fall - Variety Constraining Order　56
3.3.2　Self Organization and Economics　56
3.3.3　Communitarian[12] Collective Ownership and Strategic Networks　57
Notes　60
Exercises　61
Additional　Readings　63

Part　Two Banking Industry in China

Chapter　4 Central Bank—PBC　66
Learning　Objectives　66
Key　Topics　66
Section　4.1 The Reform of PBC　66
4.1.1　Definition of ‘Central Bank’　67
4.1.2　Transformation of the PBC　67
4.1.3　Reform the Current Financial Structure　68
Section　4.2 The Functions of PBC　70
4.2.1　The Reason for Transformation　70
4.2.2　The Biggest Change of the Functions of the PBC　71
4.2.3　The Functions of PBC　73
Section　4.3 The Instruments of Central Banking　76
4.3.1　Open Market Operation　76
4.3.2　Reserve Requirements　79
4.3.3　Rediscount　81
Notes　82
Exercises　82
Additional　Readings　85
Chapter　5 Commercial Banks　88
Learning　Objectives　88
Key　Topics　88
Section　5.1 Introduction　88
Section　5.2 What a Bank Is 　90
5.2.1　The Role of the Banking Sector in China　91
5.2.2　Vigorous Development of the Banking Sector　92
5.2.3　Increased Openness of the Banking Sector　93
Section　5.3 Intermediary Services　94
5.3.1　Settlement-Payments and Funds Transfer　94
5.3.2　Plastic Money　95
5.3.3　International Settlement　96
Section　5.4 Loans　96
5.4.1　Definition and Categories of Loans　96
5.4.2　The Credit Process　98
5.4.3　Post-Disbursement Management　100
Section　5.5 Banking on the Internet　102
5.5.1　Backgrounds　102
5.5.2　On-Line Banking Products　103
5.5.3　The Future Prospects of On-Line Banking　103
Notes　105
Exercises　106
Additional　Readings　108
Chapter　6 Supervision of Banking and Financial Institutions　110
Learning　Objectives　110
Key　Topics　110
Section　6.1 Importance and Objectives of Banking Supervision　110
6.1.1　The Role of　Ba