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HONG KONG, CHINA--(Marketwired - May 29, 2017) - The following article was first published in the China Business Knowledge (CBK) website by The Chinese University of Hong Kong (CUHK) Business School - Since the economic reform in 1978, China has created an economic legend. In 2014, it surpassed the United States in terms of economy output on the basis of purchasing power and became the world's largest economy. The past decade has seen the government's effort in establishing a market economy through privatization of state-owned enterprises (SOEs). However, after the top-down reform, the Chinese government still holds much power in the economy; in particular, self-interested politicians still impose substantial influences on SOEs' financing, investing, operating, and disclosure decisions. As such, the Chinese market is a transitional economy operating between political power (the 'visible hand') and market force (the 'invisible hand'). Yet, it is not clear how the 'visible hand' affects firms' operating behaviors. A recent study by Prof. Zhaoyang Gu, Director of the School of Accountancy and Prof. Donghui Wu, Associate Professor of the School of Accountancy and Associate Director of the Center for Institutions and Governance at the Chinese University Hong Kong (CUHK) Business School, as well as their collaborator Prof. Song Tang, Associate Professor of the School of Accountancy at Shanghai University of Finance and Economics, has revealed for the first time how political power intervenes in SOE's operating activities through studying a particular cost behavior known as 'cost stickiness'. Cost Stickiness As two important pillars of profit-driven corporations, sale revenues and operating costs should be parallel under normal operation, that is, operating costs should change proportionally along with sales change. This is the most basic rule found in any textbook of managerial accounting. However, a number of studies have found that a downward change of operating costs when sales decrease is much smaller than an upward change when sales increase by the same amount. It seems that firms' operating costs are more difficult to decrease than to increase. Such asymmetric phenomenon is given an intuitive label by researchers - 'cost stickiness'. There are different reasons to explain the 'stickiness' in firms' operating cost. In the working paper entitled "How Does the Visible Hand Shape Cost Behavior? Evidence from China", the researchers use this asymmetric cost behavior to illustrate how political incentives affect SOEs' employment decisions in China. The Importance of Political Incentives in China The issues on how political incentives affect the economic sector have been studied by many researchers in developed as well as developing countries. It is widely accepted that even in well-developed market economies, the influence of politicians cannot be ignored. This conclusive influence should get even more attention in China's transitional economy as the government still holds much power. The story dates back to China's market-oriented reform. As one consequence of the reform, the Chinese government plays a dual role as the owner of SOEs and the administrator of social affairs. The dual role offers a shortcut for the government to accomplish its political and social goals by interrupting firms' operating decisions. So what kind of incentives motivates Chinese officials to intervene in the operation of SOEs? The Cadre Evaluation System In the study, the authors look into details of the cadre evaluation system within the Chinese Communist Party (CCP). To motivate cadres and local leaders with the incentive to comply with the central government, the CCP has implemented a meritocratic political selections system which includes evaluating politicians based on the following three tiers of performance targets: Researchers find that local leaders who meet the 'hard' targets such as GDP growth are more likely to be promoted while meeting 'soft' targets have little influence in the assessment of overall performance. 'Veto' targets will also determine officials' political careers -- shortfalls to these targets will jeopardize the chances of promotion and may lead to demotions, administrative punishments, or even dismissal. Social stability, one of the 'veto' targets, is therefore of great concern to local leaders. "One can imagine the implication of unemployment rates to the government, especially for local politicians," says Prof. Wu. "As a determinant of social stability, layoffs and the resulting social unrest are significantly costly for political leaders' promotion prospects especially when the Beijing government has put a high priority on maintaining a harmonious and stable society in recent years," he says. As a result, politicians have strong incentives to distort firms' employment policy to stabilize their careers; in other words, they will require SOEs to keep more jobs and employees using their close ties and influence. Political Incentives Affect Firms' Cost Behaviors The study results reveal that SOEs exhibit higher stickiness in operating costs, particularly labor costs, than non-SOEs. On average, SOEs are more willing to increase employment than non-SOEs when sales are increasing; more importantly, SOEs are much less willing to cut down employment than non-SOEs when sales are decreasing. "When sales go up, firms naturally expand their employment base to satisfy production demands, resulting in an increase in labor cost; however, when sales go down, politically sensitive firms are more reluctant to dismiss workers than firms in a purely economic environment, resulting in a disproportionally lower decline in labor costs. The difference in the degree of asymmetric labor cost behaviors between SOEs and non-SOEs can reflect distortion of labor decisions imposed by government," Prof. Wu explains. As estimated by the researchers, labor expenditures of SOEs are about 29.3 percent more asymmetric than those of non-SOEs. Thus, with the objective to maintain social stability and avoid unemployment, state ownership changes firms' employment decisions and magnifies the cost stickiness in SOEs. However, "the will of government is ultimately carried out by individuals," says Prof. Wu. "We also find that among SOEs, labor costs are much stickier if a firm is run by a manager who is appointed by the government." This finding is another unique background in China's market as the government often appoints the board chair/CEO of listed SOEs. Unlike political connections built by personal donations or general social ties, the direct appointment relationship between the government and firms' top managers facilitates the implementation of government objectives. The Role of Institutions in China With a wide range of diverse institutions across regions, the effect of political incentives on the degree of labor cost stickiness is not uniform in China. The study finds that the positive relation between SOEs and labor cost stickiness is stronger in areas where institutions are less well developed. In other words, in institutionally weak regions, government intervention in business is more pervasive, and government shareholders have a greater influence on firms' operations. "The cross-sectional variation adds confidence to our reference on the causal link between political incentives and cost stickiness," says Prof. Wu. "It helps rule out some alternative conjectures. For example, top managers with a governmental background might be inferior to others in terms of business knowledge or administrative skills; alternatively, managers with and without political connections may differ in their political or ideological attitudes toward labor. All of these possibilities can also explain the differences in labor cost stickiness between SOEs and non-SOEs. However, with cross-variation analysis, we can at least be partially sheltered from contamination of competing explanations," he adds. Implications The study is the first to look at how political forces shape the cost behavior of Chinese firms, and therefore contributes to the understanding of privatization issues in China. "Our work lends support to the theory that partial privatization in China cannot completely remedy the government pathologies. The employment decision is one channel that leaves room to intervention by the 'visible hand' of government," says Prof. Gu. After the dramatic economic growth orchestrated by the Chinese government in the last three decades, the downside of government-oriented growth begins to draw attention. In recent years, the Chinese government has recognized the problem of economic-growth-based performance evaluation system and is changing to a more balance-scorecard-type performance evaluation of local government officials. While this change plays down the over emphasis on GDP in the performance evaluation, social stability, such as employment rate, is becoming a more important factor in the evaluation of bureaucrats. "It seems that the effects of political forces on state firms' labor employment decision are likely to persist in the future," says Prof. Gu. References: Zhaoyang Gu, Song Tang and Donghui Wu, "How Does the Visible Hand Shape Cost Behavior? Evidence from China". Working paper. This article was first published in the China Business Knowledge (CBK) website by CUHK Business School: About CUHK Business School CUHK Business School comprises two schools - Accountancy and Hotel and Tourism Management - and four departments - Decision Sciences and Managerial Economics, Finance, Management and Marketing. Established in Hong Kong in 1963, it is the first business school to offer BBA, MBA and Executive MBA programs in the region. Today, the School offers 8 undergraduate programs and 13 graduate programs including MBA, EMBA, Master, MSc, MPhil and PhD. In the Financial Times Global MBA Ranking 2017, CUHK MBA is ranked 36th. In FT's 2016 EMBA ranking, CUHK EMBA is ranked 37th in the world. CUHK Business School has the largest number of business alumni (32,000+) in Hong Kong -- many of whom are key business leaders. The School currently has about 4,400 undergraduate and postgraduate students and Professor Kalok Chan is the Dean of CUHK Business School. More information is available at: or by connecting with CUHK Business School on Facebook: and LinkedIn: About China Business Knowledge (CBK) CBK is a portal belonging to the Chinese University of Hong Kong (CUHK) Business School which provides easy access to the China-related research conducted at CUHK Business School. Through feature articles, mini case studies, discussions and a research paper database, CBK aim to narrow the knowledge gap between China and the rest of the world, providing in-depth knowledge and practical tips about doing business in China. Free content is available at or by connecting with CBK@CUHK on Facebook:, Twitter: and LinkedIn:

Li Z.,Key Laboratory for Regenerative Medicine | Li Z.,Chinese University | Li Z.,Jinan University | Li Z.,Chinese University of Hong Kong | And 18 more authors.
Journal of Clinical Rehabilitative Tissue Engineering Research | Year: 2011

BACKGROUND: Adult bone marrow-derived stem cells are promising cell source in cell therapy. Tracking of adult bone marrow-derived stem cells is crucial to demonstrate the mechanism of stem cell migration and differentiation, and develop novel strategy for functional regeneration and stem cell therapy. OBJECTIVE: To explore effects of transfected adult bone marrow clonogenic stem cells (AMCSCs) on cell phenotype, proliferation and cardiac differentiation potential. METHODS: Plasmid-encoded reporter gene maxGFP was used for nucleofection of AMCSCs with U-23 program. Growth curves of AMCSCs before and after nucleofection were compared based on results of MTT assay. AMCSCs before and after nucleofection were treated with 3 μmol/L 5-azacytidine for inducing cardiac differentiation. The cardiac differentiation specific markers, GATA4 and MLC-2v, were applied to confirm cardiac differentiation by RT-PCR. The maxGFP transfected AMCSCs were conducted the intramyocardium injection into an adult Sprague-Dawley rat left anterior descending coronary artery (LAD) ligation model to trace the in vivo expression of transfected maxGFP gene. Fluorescence images of the injected heart were analyzed on days 2 and 7 postinjection. RESULTS AND CONCLUSION: At 24 hours following nucleofection, the transfection efficiencies of AMCSCs at passages 47 and 119 were 49.4% and 43.1%. On 5 hours, green fluorescence positive cells were observed. Following nucleofection, AMCSCs maintained round shape, and could adhere and show clone-shape growth. MTT assay results demonstrated that the passages 47 and 119 of AMCSCs exhibited similar growth curves before and after nucleofection. Mean population doubling time was 8.57 and 10.28 hours in passages 47 and 119 of AMCSCs prior to nucleofection, and 9.42 and 10.42 hours following nucleofection (P =0.551, P=0.774). RT-PCR results showed that AMCSCs expressed GATA4 before and after 5-azacitidine treatment prior to nucleofection, and strongly expressed MLC-2v strip after treatment. AMCSCs expressed GATA4 prior to and following 5-azacitidine treatment after nucleofection, and strongly expressed MLC-2v after treatment. No significant difference was determined in above-mentioned indexes prior to and following nucleofection. In vivo experiment results demonstrated that a few green fluorescence positive cells were apparent in injected myocardium on days 2 and 7 following transfected AMCSCs injection. Results indicated that nucleofection is an effective and fast method for transfection of exogenous DNA into cell. The AMCSCs which are experienced with nucleofection are able to maintain their morphology, proliferation and cardiac differentiation potential. However, only a few transfected AMCSCs express the transferred gene, GFP, after intramyocardium injection.

Park J.H.,Future Technology Research Association International FTRA | Hung J.C.,Chinese University | Yen N.Y.,University of Aizu | Jeong Y.-S.,Dongguk University
Journal of Internet Technology | Year: 2014

The special issue 2014, Volume 15 of Journal of Internet Technology presents an overview of the state-of-the-art of issues and solution guidelines for the Advanced Convergence Technologies; Big Data, IoT and Cloud Computing. Joon-Min Gil and co-researchers presented a user-created computing framework for desktop grids as entitled 'Organizing a User-Created Computing Environment by RESTful Web Service Open APIs in Desktop Grids.' Using the framework, application developers can utilize DGSs easily and conveniently as computational tools in order to solve their own applications. Sadiq Almuairfi and co-researchers compared IPAS with other authentication schemes by performing two experiments and asking participants to answer a questionnaire as entitled 'A Comparative Study of Authentication Schemes with Security and Usability of IPAS.' They explained the usability and security of IPAS from the users' point of view. Prosper Mafole et al. proposed a novel fragmentation scheme called backoff-free fragment retransmission (BFFR).

News Article | October 31, 2016

SHENZHEN, China, Oct. 31, 2016 /PRNewswire/ -- The first World Medical Robotics Conference, hosted by Medical Robotics Society (MRS) and organized by ROBO Health Institute, was held in Shenzhen on Oct 29th -30th, 2016. The event was chaired by Yangsheng Xu, dean of Chinese University...

Academics will carry out research in China to resolve copyright issues posed by the new technology, which allows the copying of physical objects by scanning them. They hope to develop a single system for protecting intellectual property which could be used around the world. This automated licensing platform framework will enable 3D printing companies to licence 3D printed content and files in new ways. This could be an online database, or digital versions of a watermark to prevent unauthorised copying. Academics will analyse what the impact of this system would be on copyright law, in particular copyright law in China and internationally. The use of 3D printing is rapidly growing, but innovation has become constrained because of the lack of clarity over legal rules. The research project, which will run until December 2016, will be carried out in partnership with academics from the University of Nottingham Ningbo China, Durham University's Law School, the University of Sussex, and the Chinese University of Political Science and Law. The study, funded by the Arts and Humanities Research Council and many of the universities involved, will see academics collaborate with colleagues from around the world to establish a viable, technical and operational online licensing system and a workable legal framework for IP licensing. The academics, who are specialists in IP law, international law and contract law, will carry out interviews with 3D printing companies to discover how they operate and their needs, and spend time with one firm in particular to write a case study. Dr James Griffin, from the Law School, who will lead the project, said: "We are in contact with 3D printing companies who wish to develop a new means of creating and disseminating 3D printed content utilising their 3D printing systems and to capture new business opportunities. "However, to date they have been limited in their opportunities to do so because of the complex legal licensing environment and the lack of appropriate digital licensing standards. We can enable these companies to learn how to exploit their products." In the UK, the relevant regulatory body called the Copyright Hub has set out a list of licensing standards to use in online licensing systems. Academics will explore the appropriateness of these guidelines in the development of the proposed licensing system in China. The proposed licensing system will help companies develop their markets because they will be able to licence works in new ways. The system will also help the UK regulatory Copyright Hub find out how their system operates in practice both in the UK and in China. Explore further: 3D printing to transform the economy, UK report claims

News Article | March 15, 2016

A shoddy building collapses in an earthquake, people are injured, then hospitals and health professionals respond. So Ardalan has worked to strengthen Iran's healthcare system - from hospitals to the country's 150,000 female community health volunteers - by training them in what to do when disasters strike. "Disasters have an impact on public health, and health systems have to take a proactive approach, preventive measures to reduce the risk of disasters," said Ardalan, chair of the Disaster and Emergency Health Academy at Tehran University of Medical Sciences. Ardalan was one of several speakers at a conference held last week in Bangkok to discuss implementation of health aspects of the Sendai Framework for Disaster Risk Reduction adopted by U.N. member states a year ago. Health is a relatively new aspect of disaster risk reduction. The Sendai accord was the first to give health a higher profile, with measures to protect health by reducing damage to hospitals and ensuring medical care continues in disasters. It also tackles the risks of epidemics and pandemics. In the decade ending in 2014, disasters caused $1.4 trillion in damage, killed about 700,000 people and affected 1.7 billion others, according to the U.N. Office for Disaster Risk Reduction. Key infrastructure and healthcare facilities are often wiped out. The 2008 Sichuan earthquake in China damaged or destroyed 11,000 hospitals, while the 2004 Indian Ocean tsunami damaged 61 percent of health facilities in Aceh, Indonesia, killed 7 percent of the area's health workers and 30 percent of its midwives, according to the Overseas Development Institute. Disaster health experts like Ardalan have focused on building resilience and preparing for such catastrophes. Iran has worked to ensure its hospitals have disaster contingency plans, including evacuation plans in the event of an earthquake or flood, said Ardalan, who is also a visiting scientist at the Harvard School of Public Health and an adviser to the World Health Organization. Iran has also trained its community health volunteers - all women - to conduct household training, which includes drawing a household earthquake risk map to show danger spots near big windows or under large ceiling lights, as well as safe spots under tables or near pillars. Last year, the volunteers trained 500,000 households across Iran, he said. "We believe it's better to be proactive, work with them, so they are sensitive to their safety and know how to react if something happens," he said on the sidelines of the conference. "It's a very-cost effective intervention for the entire society." Similar efforts are under way to provide health and disaster preparedness for ethnic minority communities in rural China. Emily Ying Yang Chan, who worked for Médecins Sans Frontières for 17 years and now heads the disaster and medical humanitarian response center at Chinese University in Hong Kong (CUHK), began the ethnic minority health program about six months after the Sichuan quake. The typical community her team works with is two flights and a seven-hour bumpy car ride away, though one village, 5,000 meters above sea level on the Tibetan Plateau, took 17 hours to get to in a four-wheel-drive car. Chan's approach has been to provide the knowledge or help that villagers request, on condition that her team gets to conduct disaster risk training. Most communities want to learn more about economic development, though women also ask them to teach their husbands not to smoke or how to read food labels. In return, Chan and her students from the Collaborating Centre for Oxford University and CUHK for Disaster and Medical Humanitarian Response (CCOUC) give health advice such as not burning waste indoors and reducing salt intake. Then the team helps the community to prepare disaster kits, handing out red cloth bags, with large Chinese characters that read "rescue bag". They put in soap, a towel, a bottle of water and non-perishable food, as well as a manual battery-less torch and a multipurpose knife with a can opener - which Chan said has often been missing from aid packages. "A lot of agencies sent food supplies, but forgot to send a can opener, and many people come to the clinic with cuts because they use whatever they can to cut (open the can)," she said. The ethnic minority health program team has worked in 11 villages, visiting each one four times over a two-year period. The biggest challenge now, Chan says, is digesting the data they have gathered, to improve and scale up assistance for the villagers.

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