“Banks are caught in the middle,” ,“If they don’t help the developers finish the projects, they would end up losing much more. If they do, that of course would make the government happy, but they add more to their exposure to delayed real estate projects.” — Professor Zhiwu Chen, Chair Professor of Finance
3910 3079 / 3917 1271
- Ph.D., M.A., M.Phil., Yale University
- M.S., Changsha Institute of Technology
- B.S., Central-South University of Technology
Professor Zhiwu Chen is Director of the Hong Kong Institute for Humanities and Social Sciences (HKIHSS), Chair Professor of Finance, and Cheng Yu-Tung Professor in Development at the University of Hong Kong (HKU). His research covers finance theory, the sociology of finance, economic history, quantitative history, emerging markets, as well as China’s economy and capital markets. Professor Chen was Professor of Finance at Yale University (1999-2017) and a Special-Term Visiting Professor at Peking University (School of Economics) and Tsinghua University (School of Social Sciences).
Professor Chen started his career by publishing research papers in top economics and finance journals on topics related to financial markets and theories of asset pricing. Around 2001, he began to expand research beyond mature markets by investigating market development and institution-building issues in the context of China’s transition process and other emerging markets. He successfully led efforts to construct historical financial and social databases from China’s historical archives and has written on economic/social history topics. In 2013, he started the annual Summer School for Quantitative History cum International Symposium on Quantitative History at Tsinghua University and continues to organize them at Peking University, with the goal of promoting quantitative historical research in China and beyond.
Professor Chen has been a member of the HKU Council since November 2018. He is on the board of directors of Noah Holdings and Bairong Inc. He also served on the International Advisory Board of the China Securities Regulatory Commission (CSRC) (2012-19), the Expert Advisory Board for the formation of the China Investment Corporation (2007), and on the board of directors as an independent non-executive director at IDG Energy Investment (2016-18) and Bank of Communications (2010-18); as an independent director at PetroChina (2011-17) and Lord Abbett China (2007-15). He was on the Board of Trustees of the Yale China Association, the 12th and 13th Five-Year Plan Advisory Commission to the Beijing Municipal Government, and the Chief Academic Advisor to two 10-episode CCTV documentary series, “Wall Street” and “Money”. He was a co-founder and partner of Zebra Capital Management from 2001 to 2011. In Burson-Marsteller’s 2012 “G20 Influencers” report, Professor Chen was listed as one of the top ten political influencers in China.
Professor Chen is a frequent contributor to media publications in China on topics of economic policy, market development, institutional reform, and historical research. His work has been widely published and regularly featured in major newspapers and magazines in the United States, Hong Kong, China and many other countries. His Chinese books include: How Is Wealth Created? (2005), Media, Law and Markets (2005), Why are the Chinese Industrious and Yet Not Rich (2008), Irrational Overconfidence (2008), The Logic of Finance (2009), 24 Wealth Lectures (2009), Assessing China’s Economic Growth of the Past 30 Years (2010), On the China Model (2010), The Logic of Finance 2: Path to Individual Freedom (2015), Introduction to Finance (2018) and Introduction to Investment (2019). He has recently published a two-volume long history book in Chinese titled Logic of Civilization, that explores a number of human innovations, including mythology or magic and supernatural beliefs, technologies, social structures, cultural norms, religions, financial markets, and the welfare state. He has received research awards including the Graham and Dodd Award (2013), the Pacesetter Research Award (1999), the Merton Miller Prize (1994), and the Chicago Board Options Exchange Competitive Research Award (1994). He has also received a number of book awards in China and Hong Kong, among which are 23 awards for The Logic of Finance in China and Hong Kong, and the best book award from hexun.com for Why are the Chinese Industrious and Yet Not Rich.
Professor Chen received his PhD in financial economics from Yale University in 1990; MS in systems engineering from Changsha Institute of Technology in 1986; and BS in computer science from Central-South University in 1983. He was Assistant Professor of Finance at University of Wisconsin – Madison (1990-95); Associate Professor of Finance at Ohio State University (1995-99); and Professor of Finance at Yale University. He has been an endowed professor since joining HKU in July 2016. In July 2019, Professor Chen was conferred the title of Chair Professor of Finance in recognition of his contribution to finance.
- Finance Theory
- Sociology of Finance
- Quantitative History
- Economic History
- Emerging Markets
- China’s Economy and Capital Markets
- Logic of Civilization: How Humans have Innovated to Deal with Risk《文明的邏輯：人類與風險的博弈》. Beijing: CITIC Press, 2022.
- “Production, Consumption, and Living Standards,” (co-authored with Kaixiang Peng) In Debin Ma & Richard von Glahn (Eds.), The Cambridge Economic History of China, Volume 1: To 1800. Cambridge: Cambridge University Press, 2022, pp. 676-709.
- “Banking on the Confucian Clan: Why China Developed Financial Markets So Late” (with Chicheng Ma and Andrew Sinclair), The Economic Journal, 2022, 132(644), 1378-1413.
- Quantitative History Research, Vol 5《量化历史研究 (第五辑) 》, co-edited with Debin Ma and Long Denggao, Science Publishers, China. 2019.
- “Social Norms and Household Savings Rates in China,” (with Yvonne Chen and Shijun He) Review of Finance, 2018, 1-31.
- “A Study of Wife Prices in Qing China: How women were used as Insurance Assets,” (with Shijun He, Zhan Lin and Kaixiang Peng) China Economic Quarterly, 1, 2018, 253-280.
- “Usury, Market Power and Poverty Traps: A Study of Rural Credit in 1930s’ China,” (with Kaixiang Peng and Weipeng Yuan) Frontiers of Economics in China, 13(3), 2018, 369-396.
- Introduction to Investment《陳志武金融投資課》. Beijing: CITIC Press, 2019.
- Introduction to Finance《陳志武金融通識課》. Changsha: Hunan Literature and Art Publishing House, 2018.
- Quantitative History Research, Vols 3 & 4《量化歷史研究 (第三，四輯)》, co-edited with Debin Ma and Long Denggao, Science Publishers, China. 2018.
- “Social-economic change and its impact on violence: Homicide history of Qing China,” (with Kaixiang Peng and Lijun Zhu) Explorations in Economic History, 63, 2017, 8-25.
- The Future of Financial Reform《中國金融改革, 未來會怎樣 ?》 (with Yiping Huang and Shusong Ba). Hangzhou: Zhejiang University Press, 2017.
- “A Preliminary Study of Chinese Interest Rates from the Early Qing to the Twentieth Century Based on an Examination of the Historical Database of Chinese Interest Rates (1660 – 2000),” (with Kaixiang Peng, and Weipeng Yuan) Qing History Journal 清史研究, 104(4), 2016, 36-52.
- “Research on Debt Homicide Cases in mid Qianlong and mid-late Daoguang Reigns,” (with Zhan Lin and Kaixiang Peng) Qing History Journal 清史研究, 102(2), 2016, 75-86.
- “On the Past and Future Prospects of Quantitative History Research,” Qing History Journal 清史研究, 0(4), 2016, 1-16.
- “The Asset Management Industry in China: Its Past Performance and Future Prospects,” (with Peng Xiong and Zhuo Huang) Journal of Portfolio Management, 41(5), 2015, 9-30.
- The Logic of Finance 2: Path to Individual Freedom《金融的邏輯 2：通往自由之路》. Xi’an: Northwestern University Press (China), 2015.
- Quantitative History Research, Vol. 2《量化歷史研究 (第二輯 )》, co-edited with Debin Ma and Long Denggao, Zhejiang University Press, 2015.
- “Violent Conflicts in Private Lending: A Research Based on Qing Dynasty’s Homicide Reports,” (with Zhan Lin and Kaixiang Peng) Economic Research Journal經濟研究 (9), 2014, 162-175.
- “Discounts and Investment Performance of Chinese PIPEs,” (with Jinhui Luo) Portfolio Management, 41(2), 2014, 41-56.
- Quantitative History Research, Vol. 1《量化歷史研究 (第一輯 )》, co-edited with Debin Ma and Long Denggao, Zhejiang University Press, 2014.
- “Financial Strategies for Nation Building,” In Joseph Fan & Randall Morck (Eds.), Capitalizing China. Chicago and London: University of Chicago Press, 2013, pp. 313-333.
- “Liquidity as an investment style,” (with Roger Ibbotson, Daniel Kim and Wendy Hu) Financial Analysts Journal, 69(3), 2013, 30-44.
- “Option Pricing and Hedging Performance Under Stochastic Volatility and Stochastic Interest Rates,” (with Gurdip Bakshi and Charles Cao) In C. Lee & J. Lee (Eds.), Handbook of Quantitative Finance and Risk Management. Boston, MA: Springer, 2010, pp. 547-574.
- “A Valuation Study of Stock Market Seasonality and the Size Effect,” (with Jan Jindra) Journal of Portfolio Management, 36(3), 2010, 78-92.
- The Logic of Finance《金融的邏輯 : 當代中國創富之道》. Hong Kong: Commercial Press, 2010.
- The Logic of Finance《金融的邏輯》. Beijing: Modern Press, 2009. Korean version published in 2010.
- “The Mechanisms of Rural Credit Market in Modern China – A Research Based on Raw Documents,” (with Kaixiang Peng and Weipeng Yuan) Economic Research Journal 经济研究 (5), 2008, 147-159.
- Irrational Overconfidence?《非理性亢奮》. Beijing: CITIC Press, 2008.
- Why Are Chinese Hard-Working and yet Poor?《為什麼中國人勤勞而不富有 》. Beijing: CITIC Press, 2008.
- “Development Prospects of Chinese Industries,” In Subhash C. Jain (Ed.), Emerging economies and the transformation of international business: Brazil, Russia, India and China (BRICs) (New horizons in international business). Cheltenham: Edward Elgar, 2006, pp. 155-182.
- “China’s Stock Market in Historical Perspective,” The PB Newsletter, Issue No. 5, July 2006, 29-40.
- “Informational Content of Option Volume Prior to Takeovers,” (with Charles Cao and John Griffin) The Journal of Business, 78(3), 2005, 1073-1109.
- “Stock valuation in dynamic economies,” (with Gurdip Bakshi) Journal of Financial Markets, 8(2), 2005, 111-151.
- “A free press could help China’s economy,” Financial Times, September 20, 2005.
- “Pricing and hedging long-term options,” (with Gurdip Bakshi and Charles Cao) Journal of Econometrics, 94(1), 2000, 277-318.
- “Do Call Prices and the Underlying Stock Always Move in the Same Direction?” (with Gurdip Bakshi and Charles Cao) The Review of Financial Studies, 13(3), 2000, 549-584.
- “Empirical Performance of Alternative Option Pricing Models,” (with Gurdip Bakshi and Charles Cao) Journal of Finance, 52(5), 1997, 2003-2049.
- “Equilibrium Valuation of Foreign Exchange Claims,” (with Gurdip Bakshi) Journal of Finance, 52(2), 1997, 799-826.
- “An alternative valuation model for contingent claims,” (with Gurdip Bakshi) Journal of Financial Economics, 44(1), 1997, 123-165.
- “The spirit of capitalism and stock-market prices,” (with Gurdip Bakshi) The American Economic Review, 86(1), 1996, 133-157.
- “Portfolio Performance Measurement: Theory and Applications,” (with Peter Knez) The Review of Financial Studies, 9(2), 1996, 511-555.
- Received numerous research rewards including the Top Graham and Dodd Award for the Best Paper of 2013 in Financial Analyst Journal, the Pacesetter Research Award (1999), the Merton Miller Prize (1994), and the Chicago Board Options Exchange Competitive Research Award (1994).
- Listed with one of the top 50 “Most Cited Articles of All Time” of the Journal of Finance (ranked #42, Empirical Performance Of Alternative Option Pricing Models, with Gurdip Bakshi and Charles Cao, published in December 1997).
- Listed in 2012 “G20 Influencers” report by Burson-Marsteller as one of the top ten political influencers in China.
- Named one of the “10 Public Intellectuals” who influenced China in 2010, by Times Weekly, a national newspaper based in Guangzhou, China.
- Received 23 “Best Books of the Year” awards in various categories and for 2009 in China for his book, The Logic of Finance 《金融的邏輯》.
- Received the First Prize, Hexun Best Books of 2008, for his book, Why Are Chinese Hard-Working and yet Poor?《中國人為什麽勤勞而不富有》.
- Named one of the 20 People of the Year in defending “Public Interest”, 2006, by Nang Feng Cuan magazine in China.
- Professor Chen’s Chinese blog was named one of the Top 10 Blogs in China in the topic area of “Public Interest”, 2006.
Over the past millennium, China has relied on the Confucian clan to achieve interpersonal cooperation, focusing on kinship and neglecting the development of impersonal institutions needed for external finance. In this paper, we test the hypothesis that the Confucian clan and financial markets are competing substitutes. Using the large cross-regional variation in the adoption of modern banks, we find that regions with historically stronger Confucian clans established significantly fewer modern banks in the four decades following the founding of China's first modern bank in 1897. Our evidence also shows that the clan continues to limit China's financial development today.
China’s desire to escape the shadow of the U.S. dollar and build an alternative infrastructure for global finance is being stymied by one major factor: Its reluctance to loosen the shackles around its own currency. By creating the Cross-Border Interbank Payment System, or CIPS, back in 2015, the Chinese financial authorities had hoped to provide a way for companies and individuals to keep money flowing internationally — even if China were ever to come under the same kind of economic pressure Western countries are currently meting out to Russia, following its invasion of Ukraine. The problem is that CIPS has neither the scope nor the technical capability to match its Western counterpart — the Society for Worldwide Interbank Financial Telecommunication (SWIFT), often described as the Gmail of the global banking system.
China’s smaller banks could come under greater scrutiny over financing to Russia as the nation’s biggest lenders are already showing signs of complying with U.S. and European sanctions in a bid to protect their large international footprints.
It’s been a record year for China’s internet moguls, but not in the way most would have hoped. The country’s 10 richest tech tycoons lost $80 billion in combined net worth in 2021, according to the Bloomberg Billionaires Index, amid widescale crackdowns by Chinese regulators. The drop represents almost a quarter of their total wealth and is the largest one-year decline since 2012, when the index started tracking the world’s richest people.
Billionaire owners of Chinese developers have dipped into their own pockets for at least US$3.8 billion to save their troubled companies from default, as a cash crunch engulfs the industry. From sales of luxury assets to stakes in sought-after listed companies, the personal balance sheets of China's property tycoons have become key for investors to determine whether developers will meet their debt obligations.