Zhiwu Chen
Prof. Zhiwu CHEN
Finance
Chair Professor of Finance
Cheng Yu-Tung Professor in Finance
Director, Centre for Quantitative History
Director, Hong Kong Institute for Humanities and Social Sciences
HKU Council Member

3910 3079 / 3917 1271

KK 1338

Academic & Professional Qualification
  • Ph.D., M.A., M.Phil., Yale University
  • M.S., Changsha Institute of Technology
  • B.S., Central-South University of Technology
Biography

Professor Zhiwu Chen is Chair and Cheng Yu-Tung Professor in Finance at the University of Hong Kong (HKU). Professor Chen currently serves as director of both Hong Kong Institute for Humanities and Social Sciences (HKIHSS) and Centre for Quantitative History (CQH). 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 a former 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. In 2022, Professor Chen’s Quantitative History of China project was awarded HK$67.32 million (over US$8.5 million) under the Areas of Excellence (AoE) Scheme, marking a new record high for government funding raised for the HKU Business School since its establishment.

Professor Chen has been a member of the HKU Council since November 2018. He is on the board of directors of Noah Holdings, Bairong Inc., and GigaCloud Tech. 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.

Teaching

CCHU9069 Economic Logic of Civilizations: How Human Societies have Innovated to Deal with Risk

Research Interest
  • Finance Theory
  • Sociology of Finance
  • Quantitative History
  • Economic History
  • Emerging Markets
  • China’s Economy and Capital Markets
Selected Publications
  • “Hedging Desperation: How Kinship Networks Reduced Cannibalism in Historical China,” with Zhan Lin and Xiaoming Zhang, 2023, forthcoming in Journal of Comparative Economics.
  • “Quantitative history studies on China: State capacity, institutions, culture and human capital from prehistoric times to the present,” (co-authored with Chicheng Ma) in Zhiwu Chen & Chicheng Ma (Eds.), Asia-Pacific Economic History Review Special Issue: Quantitative Studies on Chinese Economic History, 2023, Volume 63, Issue 2, pp. 128-144.
  • 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 6《量化历史研究 (第六辑) , co-edited with Debin Ma and Denggao Long, Science Publishers, China. 2021.
  • Quantitative History Research, Vol 5《量化历史研究 (第五辑) 》, co-edited with Debin Ma and Denggao Long, 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 Denggao Long, 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 Denggao Long, 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 Denggao Long, 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.
Awards and Honors
  • Awarded the “Economist of the Year 2023” by South Reviews Magazine (南風窗).
  • Awarded HK$67.32 million (over US$8.5 million) under the Areas of Excellence (AoE) Scheme for the Quantitative History of China project in 2022, marking a new record high for government funding raised for the HKU Business School since its establishment.
  • Conferred the title of Chair Professor of Finance in recognition of his contribution to finance (2019).
  • 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.
Recent Publications
The Transformation of China’s Industrial Policy: Fortifying National Resilience

Prof. Zhiwu Chen, Chair Professor of Finance at HKU Business School, acknowledges this long-standing shift, stating, "This has been going on for at least about 8-10 years," referring to an industrial policy factoring in "war preparation."

China’s Digital Talent Cultivation: Scholars Say Problems Abound

Prof. Zhiwu Chen, Chair Professor of Finance at HKU Business School, emphasises that the key concern is to maintain confidence in the market. While political measures to boost the economy may be well-intentioned, their effectiveness can vary depending on the specific context, economic conditions, and implementation.

China’s consumers seek security in ‘the only safe asset’ as gold purchases remain strong

Prof. Zhiwu Chen, Chair Professor of Finance at HKU Business School, commented that gold represented the only safe asset for Chinese consumers to protect their wealth against domestic inflation, asset price declines, as well as uncertainties in the global landscape.

Janet Yellen in China: how far did trip move the ball for US-China relations as presidential election looms?

“The November election pressure may force Biden to be more aggressive on the US-China trade front, as this is one issue that American politicians can win easy points,” said Chen Zhiwu, the chair professor of finance at the University of Hong Kong, after Yellen and her Chinese counterparts failed to address some major issues.

China’s Quant Clampdown Risks Damaging Fragile Markets for Years

To lessen market volatility, Chinese regulators began implementing measures that affected quantitative trading strategies. These included rejecting requests to short sell, conducting on-site reviews of trading operations, and temporarily halting transaction capabilities for some firms. The restrictions had a negative impact on funds that relied on algorithmic models as they prevented executions, recalled loaned shares, and introduced unpredictability that computer systems had not anticipated. As a result, these funds experienced performance disparities when compared to wider benchmarks. Prof. Zhiwu Chen, Chair Professor of Finance at HKU Business School, shared his views on A-share market regulation in an interview with Bloomberg.

China Revives Socialist Ideas to Fix Its Real-Estate Crisis

Chen Zhiwu, chair professor of finance at the University of Hong Kong, compared China’s new housing strategy to the way Beijing uses its so-called “national team” of state funds to buy equities to try to prop up the depressed stock market. Such efforts have often failed to sustainably bolster the market. Using government money to buy up distressed real estate would be no different, he said, given the country’s demographic challenges and supply glut. Government interventions could also raise uncomfortable questions about social fairness, he said. Buying properties from existing homeowners or developers when the market is weak would amount to using national resources to subsidize owners who have the flexibility to sell, when others don’t, he said. “It turns into an issue of wealth distribution,” he said. “Not everyone in China owns multiple apartments, nor are they ready to sell.”

China could boost demand and ease deflation with cash payments, analysts say

Chen Zhiwu, chair professor of finance at the University of Hong Kong, said “The biggest deflation factor is the high sense of insecurity among businesspeople, private firms and officials”. He said “No one feels really secure about tomorrow.”

China’s hi-tech manufacturing faces ‘extraordinary pressures’ as 2023 output stalls

Chen Zhiwu, a chair professor of finance at the University of Hong Kong, said headwinds such as risks of a global recession and US-China tensions would continue to exert “extraordinary pressures” on China’s hi-tech push. “The US tech war has largely thwarted Chinese tech companies’ [initial public offering] opportunities. Even if these tech manufacturers succeed in going public, the potential sanctions would affect their market valuations,” said Chen. He added China’s weak economic momentum is also weighing on the market’s overall willingness to invest, with hi-tech manufacturing just one element. “The rapid development of hi-tech industries over the past 20 years has provided China with a massive boost to its economic boom, this was partly due to the impact of a stable external environment on investor confidence,” Chen said.

China’s economic ‘recovery is still shaky’ as Beijing looks to get it back on solid footing in 2024

Chen Zhiwu, chair professor of finance at the University of Hong Kong, said restoring confidence would be key, but that it would take much more than just talk. “The really useful and meaningful way to boost household and private business confidence is to depoliticise both economic policymaking and the business sector,” he said. “Otherwise, the ‘3D’ challenges – deflation, debt and deleveraging – will continue.”

陳志武教授專訪:陳志武回來了,決定做一件有趣的事

出書,演講,評論,他觀察中國,也參與中國,溶金融邏輯於中國水土。 在資本的海洋中,他俯身細看數字背後的人文,用簡潔的經濟學語言,解釋文明演進與社會建構。 他談理想宏願,唯萬家燈火,是其經濟學思想的倒影,仍未倦,且駐講台,傳道授業解惑。 在東西方思想交會處,他篤定,做兩者的橋樑。