China’s E-Economy: An overview of Opportunities and Threats

Qiao Yao

Abstract


China is the world biggest country in terms of population. It has the highest number of internet and mobile users. The world most substantial labor forces reside in China. A large proportion of the world is dependent on its exports. Chinas economy grew, in the last decade because of its exports, it got attention all over the world. Economy experts consider China as an economic threat to the USA. However, more studies are mainly focused on China populations, Exports, and labor focus because of the high quantity. The dynamics of the economy has changed in the last decade because of internet penetration across the globe. The Chinas role in digital aspects is least studied. Therefore this paper has focused on providing an overview of E-economy of China. Through literature and world-leading financial and consultancy firms reports it has been observed that just like other aspects of the economy, the e-economy of China is also growing. Today in 2019 where more than 50% of the world has access to the internet, It is considered that the Silicon Valley of USA is deriving the digital age because all big tech companies are located in the USA. USA main exports are Internet-related or Tech products. It is a fact that the USA E-economy contributes more to GDP compared to China. However, China has a potentially bright future in this area and can be the leading country in technology. Exploring the future possibilities, the opportunities which China has to grow in the digital age, the researchers found already there are areas in digital aspects where China has to outnumber the USA. For instance, the Fintech China got more Capital venture investments in 2016 compared to the USA. China is the world second country after the USA in attracting venture capital investment for Virtual Reality, Autonomous Driving, Wearables technologies, Education Technology, Robotics and drones, and 3D Printing. China is in the third position in terms of attracting investment for big data and artificial intelligence. The study concludes that China needs to focus more on big data and AI to continue its growth.  The growing digitalization can improve agriculture and industrial activities as the economy is maturing. The paper is useful for digital experts to view the understand the e-economy in depth, future researchers can narrow down the topic to observe the impact of E-economy on agriculture and industrial sector.


Full Text:

PDF

References


Agarwal, V., & Taffler, R. J. (2007). Twenty-five years of the Taffler z-score model: Does it really have predictive ability? Accounting and Business Research, 37(4), 285-300. http://dx.doi.org/10.1080/00014788.2007.9663313

Altman, E. I. (1968) a. Financial Ratios, Discriminant Analysis and The Prediction Of Corporate Bankruptcy. The Journal of Finance, 23(4), 589-609. http://dx.doi.org/10.1111/j.1540-6261.1968.tb00843

Altman, E. I. (1982) b. Accounting implications of failure prediction models. The Journal of Accountancy, 6(1), 4-19.

Altman, E. I. (2007) c. Revisiting credit scoring models in a Basel 2 environment. Lecture at National Taiwan University. Retrieved from www.fin.ntu.edu.tw/~hwangdar/94emba19.ppt

Altman, E. I., & McGough, T. P. (1974). Evaluation of a company as a going-concern. The Journal of Accountancy, 143, 50-57.

Aziz, M. A., & Dar, H. A. (2006). Predicting corporate bankruptcy: where we stand? Corporate Governance, 6(1), 18-33. http://dx.doi.org/10.1108/14720700610649436

Beaver, W. H. (1966). Financial ratios as predictors of failure. Journal of Accounting Research, 4, 71-111. http://dx.doi.org/10.2307/2490171

Beynon, M. J., & Peel, M. J. (2001). Variable precision rough set theory and data discretization: An application to corporate failure prediction. Omega, 29, 561-576. http://dx.doi.org/10.1016/S0305-0483(01)00045-7

Blum, M. P. (1974). Failing company discriminant analysis. Journal of Accounting Research, 12(1), 1-25. http://dx.doi.org/10.2307/2490525

BSE India. (2016). Introduction: BSE India. BSE India. Retrieved from http://www.bseindia.com/static/about/introduction.aspx?expandable=0

Calandro Jr, J. (2007). Considering the utility of Altman's Z-score as a strategic assessment and performance management tool. Strategy & Leadership, 35(5), 37-43. http://dx.doi.org/10.1108/10878570710819206

Cendrowski, S. (2015). China's Global 500 companies are bigger than ever—and mostly state-owned. Fortune. Retrieved from http://fortune.com/2015/07/22/china-global-500-government-owned/

Chen, M. C., Cheng, S. J., & Hwang, Y. (2005). An empirical investigation of the relationship between intellectual capital and firms’ market value and financial performance. Journal of Intellectual Capital, 6(2), 159-176. http://dx.doi.org/10.1108/14691930510592771

Chen, S., & Dodd, J. L. (1997). Economic Value Added (EVA™): An Empirical Examination Of A New Corporate Performance Measure. Journal of Managerial Issues, 9(3), 318-333.

Chung, K. C., Tan, S. S., & Holdsworth, D. K. (2008). Insolvency prediction model using multivariate discriminant analysis and artificial neural network for the finance industry in New Zealand. International Journal of Business and Management, 3(1), 19-29.

Damodaran, A. (2007). Return on Capital (ROC), Return on Invested Capital (ROIC) and Return on Equity (ROE): Measurement and Implications. Stern School of Business, 2-66. http://dx.doi.org/10.2139/ssrn.1105499

Deakin, E. B. (1977). Business failure prediction: An empirical analysis. In E. Altman, & A. Sametz (Eds.), Financial crises: Institutions and markets in a fragile environment. New York: John Wiley.

Foo, S. L. (2015). Financial Health & Corporate Performance of Listed Manufacturing Companies in Hong Kong & Singapore: A Comparative Study of the Two Asian Tigers. Asian Journal of Business and Management, 3(2), 148-154. Retrieved from http://www.ajouronline.com/index.php?journal=AJBM&page=article&op=view&path%5B%5D=2451

Frydman, H. E., Altman, E. I., & Kao, D. G. (1985). Introducing Recursive Partitioning for Financial Classification: The Case of Financial Distress. Journal of Finance, 40(1), 269-291. http://dx.doi.org/10.1111/j.1540-6261.1985.tb04949.x

Gunathilaka, C. (2014). Financial Distress Prediction: A Comparative Study of Solvency Test and Z-Score Models with Reference to Sri Lanka. The IUP Journal of Financial Risk Management, 11(3), 39-51.

Hagel, J., & D, J. (2010). The Best Way to Measure Company Performance. Harvard Business Review. Retrieved from https://hbr.org/2010/03/the-best-way-to-measure-compan.html

IndexMundi. (2013). China vs. India: Country Comparisons. IndexMundi. Retrieved from http://www.indexmundi.com/factbook/compare/china.india/economy

International Monetary Fund (IMF). (2017). October 2017: Making the Most of the Upswing. Regional Economic Outlook. Retrieved from https://www.imf.org/en/Publications/REO/APAC/Issues/2017/10/09/areo1013

Koh, H. C., & Killough, L. N. (1990). The use of multiple discriminant analysis in the assessment of the going concern status of an audit client. Journal of Business Finance & Accounting, 17(2), 179-192. http://dx.doi.org/10.1111/j.1468-5957.1990.tb00556.x

Levitan, A. S., & Knoblett, J. A. (1985). Indicators of exceptions to the going concern assumption. Auditing: A Journal of Practice and Theory (Fall), 26-39.

Meric, I., Lentz, C., Li, S., & Meric, G. (2014). A Comparison of the Financial Characteristics of Hong Kong and Singapore Manufacturing Firms. Global Journal of Business Research, 8(3), 31-37.

Monaghan, A. (2014). China surpasses US as world's largest trading nation. The Guardian. Retrieved from http://www.theguardian.com/business/2014/jan/10/china-surpasses-us-world- largest-trading-nation

Neophytou, E., Charitou, A., & Charalambous, C. (2001). Predicting corporate failure: Empirical evidence for the UK. Discussion Paper No. 01-173, March, School of Management, University of Southampton, Southampton.

Ohlson, J. (1980). Financial Ratios and the Probabilistic Prediction of Bankruptcy. Journal of Accounting Research, 18(1), 109-131. http://dx.doi.org/10.2307/2490395

Perez, M. (2006). Artificial neural networks and bankruptcy forecasting: a state of the art. Neural Computer & Application, 15, 154-163. http://dx.doi.org/10.1007/s00521-005-0022-x

Pradhan, R. (2014). Z Score Estimation for Indian Banking Sector. International Journal of Trade, Economics and Finance, 5(6), 516-520. http://dx.doi.org/10.7763/IJTEF.2014.V5.425

Saji, T. G. (2018). Financial Distress and Stock Market Failures: Lessons from Indian Realty Sector. Vision, 22(1), 50-60. http://dx.doi.org/10.1177%2F0972262917750244

Shanghai Stock Exchange (SSE). (2015). Brief Intro: Shanghai Stock Exchange (SSE). Shanghai Stock Exchange (SSE). Retrieved from http://english.sse.com.cn/aboutsse/sseoverview/brief/

Sherbo, A., & Smith, A. (2013). The Altman Z-Score Bankruptcy Model at Age 45: Standing the Test of Time? ABI Journal, 32(11), 40-42.

Stowe, J. D., Robinson, T. R., Pinto, J. E., & McLeavey, D. W. (2002). Analysis of Equity Investments: Valuation (pp. 55-58). Association for Investment Management and Research (AIMR).

Thai, S., Goh, H., Teh, B., Wong, J., & Ong, T. (2014). A Revisited of Altman Z- Score Model for Companies Listed in Bursa Malaysia. International Journal of Business and Social Science, 5(12), 197-207.

Tandiontong, M., Mathius, M. (2017). The Influence of Financial Distress Using Altman Z-Score, the Beta of Stocks and Inflation to the Stock Return. Journal of Finance and Banking Review, 2(2), 21-27. Retrieved from https://ssrn.com/abstract=3000747

Trippi, R. R., & Turban, E. (1996). Neural networks in finance and investing: using artificial intelligence to improve real-world performance (pp. 367-394). London: IRWIN Professional Publishing.

Wang, Y., & Campbell, M. (2010). Business Failure Prediction For Publicly Listed Companies In China. Journal of Business and Management, 16(1), 75-88.

Wang, Y., & Campbell, M. (2010). Do Bankruptcy Models Really Have Predictive Ability? Evidence Using China Publicly Listed Companies. International Management Review, 6(2), 77.

World Bank. (2018). Annual GDP Growth (%). Retrieved from https://data.worldbank.org/country/china?view=chart

World Federation of Exchanges. (2015). Monthly Reports. World Federation of Exchanges. Retrieved from http://www.world-exchanges.org/home/index.php/statistics/monthly-reports

Zhao, Y. (2013). The Relationship between Share Price Gains, Corporate Performance and Risk. OALib Journal, 110-112. Retrieved from http://www.oalib.com/paper/2993772




DOI: https://doi.org/10.5296/jad.v5i2.14526

Refbacks

  • There are currently no refbacks.




Journal of Asian Development  ISSN 2377-9594   E-mail: jad@macrothink.org

Copyright © Macrothink Institute 

To make sure that you can receive messages from us, please add the 'macrothink.org' domains to your e-mail 'safe list'. If you do not receive e-mail in your 'inbox', please check your 'spam' or 'junk' folder.